Some leftover thoughts from yesterday's news that we're officially in a recession:
This is shaping up as a long one. It's a year old, which means it's already outlasted the eight-month-long contraction sparked by the dot-com debacle. The early-90s recession, which was terrible for California but fairly tolerable in many parts of the U.S., also petered out after eight months.
You have to go back to the recession of 1981-82, which lasted 16 months, to find anything comparable to what we're living through now. Given the many predictions that things are still getting worse, it's pretty certain that this recession will match or top that one for duration. (National unemployment topped 10 percent in that one; the current U.S. rate is 6.5 percent). The 1973-75 recession also lasted 16 months and brings to mind fond memories of waiting in line for gasoline.
Here's a list of recessions and expansions going back to the 1850s if you're interested, courtesy of the National Bureau of Economic Research. The NBER is the nonprofit group that actually tells us whether it's a recession or not.
When the current recession will end is anyone's guess. Jeff Michael, of the University of the Pacific, told me he expects the recovery to begin next fall. Economist Joshua Shapiro
It was interesting (for me and economists, anyway) to read the NBER's official declaration of the recession.. It's widely believed, and reported, that a recession consists of at least 2 straight quarters of shrinking Gross Domestic Product. Turns out it's more complicated than that. The NBER has a wide-ranging definition in which GDP is merely one factor.
The GDP actually grew during the first 2 quarters of 2008, but the NBER says the recession was alive and well during that period because income and other key indicators were falling.