"The Great Recession," a handy nickname embraced by journalists and academics for the current severe economic downturn, earned official validation Monday.
The National Bureau of Economic Research announced that the recession ended in June 2009, making it the longest -- 18 months -- since World War II. The bureau's Business Cycle Dating Committee, the official arbiter of recessions, also declared it the deepest since the Great Depression, at least in terms of job losses. From December 2007, when the committee says the recession started, the economy shed 5 percent of nonfarm payroll jobs.
The panel, which takes its time before making its pronouncements, set the recession's "trough" at June 2009, based on various economic indicators, including gross domestic product, income, employment, industrial production and wholesale-retail sales.
The main exception was unemployment, which bottomed out in December 2009. Although that gap has led some to fear a "jobless recovery," Professor Robert J. Gordon, a member of the committee for more than 30 years, said that the lag between growth in the gross domestic product and a turnaround in hiring was even worse -- 19 months -- after the 2001 recession.
Compared to the size of the economy, this recession is not as deep as the one of 1981-82, Gordon said, but that was followed by a robust recovery. While the economy has been growing for 15 months, it's relatively anemic -- only 1.6 percent in the second quarter of 2010. A 2.5 percent growth rate is necessary to keep employment constant.
Business is spending more on investment than after previous recessions but has been leery about hiring, and consumers, battered by falling house prices and credit card debt, are skittish about spending.
While the bureau's conclusions are the official word on the recession's duration and severity, most Americans, especially those without jobs, won't consider the downturn over until the unemployment rate drops substantially.