A rule of thumb is that recessions are indicated by two consecutive quarters of negative growth (or contraction) of gross domestic product (GDP). As such, it generally is something economists look back on, indicating a recession started months in the past.
It is now official. The United States is in a recession. In fact, a report from the National Bureau of Economic Research's seven-member Business Cycle Dating Committee states the U.S. recession began in December 2007. Also Read: EU Officiallly in Recession, Negative Growth >>
To be honest, this declaration of a recession only confirms what many private economists, lawmakers and John and Jane Q. Public already knew about the state of the U.S. Economy.
Bush Administration Tony Fratto commented:
“What’s important is what is being done about it. The most important things we can do for the economy right now are to return the financial and credit markets to normal, and to continue to make progress in housing, and that’s where we’ll continue to focus."
According to MSNBC, it was notable that Fratto did not use the word "recession" in his remarks.
This is the first "official" recession since 2001, when the tech bubble burst. This period of expansion lasted 73 months, from November 2001 to December 2007.
The Dow Jones Industrial Average is down nearly 500 points, but not as a result of this report; it was in free-fall before the recession announcement was made.
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