December 2007 marked the end of the U.S.' economic expansion and the beginning of a recession, according to the National Bureau of Economic Research's (NBER) Business Cycle Dating Committee. The NBER has historically acted as the authority in determining when the nation is, in fact, in a recession, and the committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions.
A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income and other indicators, NBER says.
The committee believes that the two most reliable comprehensive estimates of aggregate domestic production are normally the quarterly estimate of real gross domestic product (GDP) and the quarterly estimate of real gross domestic income, both produced by the Bureau of Economic Analysis.
The committee determined that the decline in economic activity in 2008 met the standard for a recession, and all evidence other than the ambiguous movements of the quarterly product-side measure of domestic production confirmed that conclusion. Many of these indicators, including monthly data on the largest component of GDP – consumption – have declined sharply in recent months.
SOURCE: The National Bureau of Economic Research