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The organization tasked with dating the start and end of recessions -- the National Bureau of Economic Research -- has officially laid our recent one to rest. Actually, it says the recession ended over a year ago, in June 2009.
Why did it take so long to call the bottom? And why now? Hard to say. NBER was still on the fence as recently as April, when it said that, "Although most indicators have turned up, the committee decided that the determination of the trough date on the basis of current data would be premature." Since then, most indicators have moved slightly down. This stuff isn't exactly a science.
The importance of this announcement is trivial. Most have been under the impression that the downturn troughed last summer since ... last summer. That was when everything from GDP to incomes to exports to manufacturing began a fairly sharp run. Corporate profits have also zoomed back, with companies from Pfizer (NYSE: PFE ) to Intel (Nasdaq: INTC ) to Wal-Mart (NYSE: WMT ) making more money over the past 12 months than they did in 2007, when the recession began. If recessions are to be measured by output, the death of this downturn wasn't hard to spot.
Also, if a depression is defined as a 10% decline in GDP (that's what the textbooks say), then we didn't come close:
Still, most people's practical definition of recessions and depressions have nothing to do with GDP. It's about employment. And there's no argument that the job situation is still a bloody disaster.
Maybe the official end of this recession will boost confidence a little. That'd be good news. Stocks hit a 4-month high today, so maybe it is. But there's no question that the economy is still stuck in a hole.