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Archive for Friday, July 18, 2003

It’s official: Recession ended in late ‘01

Cycle-dating economists point out period’s end didn’t quell hard times

July 18, 2003

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— The 2001 recession, the country's first downturn in a decade, officially ended in November of that year, only eight months after it had begun, an academic group declared Thursday.

The decision was made by the National Bureau of Economic Research, a group of academic economists that is the recognized arbiter of when recessions begin and end in the United States.

The announcement came after a meeting of the NBER's Business Cycle Dating Committee, which has struggled for months to reconcile the fact that while the U.S. economy resumed growth in late 2001, as measured by the gross domestic product, unemployment has continued to rise.

While the determination of the official ending date for the recession is of interest to economic historians, it is likely to bring little comfort to the nation's unemployed, who have seen their ranks swell in recent months.

The unemployment rate hit a nine-year high of 6.4 percent in June, bringing more charges from Democrats that President Bush is mishandling the economy.

Robert Hall, who is chairman of the NBER's cycle dating committee, told reporters in a conference call that political considerations played no role in the timing of the committee decision.

In a statement, the NBER cycle dating committee stressed that its announcement of when the downturn ended did not mean that the economy's hard times ended at that point.

"In determining that a trough occurred in November 2001, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity," the panel said in a statement.

The panel said that it was determining only that in November 2001, the recession -- which it defines as a period of falling economic activity spread across the economy -- came to an end and the economy began growing again.

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