WASHINGTON (MarketWatch) -- The U.S. economy entered a recession in December 2007, a committee of economists at the private National Bureau of Economic Research said Monday.
The economy reached a peak of activity in December 2007 and has been declining since, according to the business cycle dating committee of the NBER.
The government, academics and the private sector generally defer to the NBER's judgments about recessions.
The committee does not judge a recession as two consecutive quarterly declines in gross domestic product; rather, it examines quarterly data along with four key monthly economic indicators: employment, incomes, industrial output and sales.
Employment and incomes peaked in December, industrial output peaked in January, and sales peaked in June, the NBER committee said.
The committee's definition of a recession is as follows: "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."
The committee, which includes academic economists, met on Friday by conference call. Several members of the committee had said earlier that the economy was likely in a recession, but said they were waiting for more information before making the call about when the recession had begun.
Democrats on Capitol Hill said the news was hardly surprising and reiterated calls for an economic stimulus package. Senate Majority Leader Harry Reid, D-Nevada, said he and other Democrats will send a package to the White House as soon as possible after President-elect Barack Obama takes office in January.
"The announcement simply makes official what we have long known - with rising costs of living, rising unemployment, record foreclosures and depleted savings, we must do more to help families make ends meet," Reid said in a statement. He said a recovery package must create good-paying jobs in the U.S., cut middle class taxes and instill confidence to stabilize the market.
The committee members are: chairman Robert Hall of Stanford University, Martin Feldstein of Harvard University, Jeffrey Frankel of Harvard, Robert Gordon of Northwestern University, James Poterba of the Massachusetts Institute of Technology, David Romer of the University of California at Berkeley, and Victor Zarnowitz of the Conference Board.
One member of the committee, Christine Romer of California Berkeley, did not participate in the conference call. She resigned from the committee last week to join the Obama administration as head of the Council of Economic Advisers.
The expansion from November 2001 to December 2007 lasted 73 months. The previous expansion lasted 120 months. The average expansion since the end of World War II has lasted 57 months. The typical postwar recession has lasted 10 months.
Rex Nutting is Washington bureau chief of MarketWatch.
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