WASHINGTON (Reuters) - The arbiter of U.S. recessions is not ready to declare that one has begun and probably won’t decide until well after the November presidential election, the chairman of the recession-dating committee said on Tuesday.
Robert Hall, a Stanford University economist who leads the National Bureau of Economic Research’s business cycle dating committee, said the group was waiting to examine more economic data and was “resolute” in not allowing political considerations to affect its decision.
“We have been subjected to political pressure, which I’m not going to talk about,” he said at an economics conference in Washington. “This has been an issue but we’ve stood tall on that.” He did not elaborate.
Democratic Sen. Barack Obama has gained ground on his Republican rival Sen. John McCain in the past couple of weeks as the financial market turmoil focuses attention on the economy. Opinion polls show that voters think Obama is better positioned to address economic problems.
Hall said the committee had “not entered the territory of even tentatively considering” pinpointing the end of the economic expansion that began in late 2001. He said the group was staying in contact via e-mail, and he would not rule out an in-person meeting on the sidelines of the American Economic Association annual conference in January.
Hall said the current stage of the business cycle was mirroring 2001, when strong productivity growth meant economic output did not drop dramatically even though companies were cutting jobs at a recessionary pace.
That made it tough for the committee to call a recession, and even tougher to time the recovery because job losses persisted long after the broader economy rebounded.
This year, the economy has lost jobs for nine consecutive months, yet gross domestic product -- the broadest measure of economic activity -- remained in positive territory through the first half. Some economists think that the third-quarter reading may be negative.
While it would take two straight quarters of contracting GDP to meet the popular definition of recession, NBER looks for “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.”
Hall said industrial production was less important now than it was in the 1970s or 1980s, when the U.S. economy was far more reliant on manufacturing. Now, the committee focuses primarily on monthly GDP and employment, and those are giving conflicting signals, much like they did in 2001.
During the last cycle, the committee chose March 2001 as the start of the recession because that was when payrolls peaked, Hall said. However, when it came time to determine when the recession ended, the committee put more emphasis on real GDP because that turned up well before the job market revived.
If the NBER used payrolls as its guide this time, the peak may be around the end of 2007. Martin Feldstein, who recently stepped down as head of the NBER, has said repeatedly that he thought the economy peaked in December or January.
Hall said he personally thought the U.S. economy was probably in a recession, but quickly added: “That’s not official. I’m saying it very quietly.”
Editing by Dan Grebler
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