For the three or four people in the United States who didn't already know, it's now official: The US economy has fallen into a recession.
The National Bureau of Economic Research's Business Cycle Dating Committee declared yesterday that the recession started last March, 10 years exactly from the end of the last recession.
The real question now is: Is the recession almost over?
A combination of cheap oil, low interest rates, and resilient consumer spending could make the downturn relatively brief. Most experts now agree the recovery for the world's largest economy will start sometime next year. The quibbling starts when you try to pinpoint it closer than that.
Treasury Secretary Paul O'Neill, for instance, one of the optimists, predicts that "we will see a recovery at the beginning of next year." The consensus of some 50 private economists recently surveyed by Blue Chip Economic Indicators puts it later, sometime in the second quarter.
Victor Zarnowitz, a long-time member of the Dating Committee, also guesses the slump will hit bottom in the spring. Speaking as an individual economist working for the Conference Board in New York, he adds: "It might come earlier. The war in Afghanistan has been going better." That could encourage consumers to spend more.
The average length of the post World War II recessions has been 11 months. The longest was 16 months. The shortest, six months. By the NBER committee's dating, the US has already been in recession for almost eight months.
The official designation by a private research group based in Cambridge, Mass., isn't just academic. It could impact the political scene in Washington.
In the Senate, Democrats and Republicans are quarreling over the details of a fiscal stimulus package billed as a way to help the economy recover from its slump. The NBER's declaration could put a fire under the discussion.
"I hope Congress moves quickly on an economic stimulus package ... and I can sign it before Christmas," President Bush said yesterday, trying to create momentum for the GOP bills.
The differences, though, remain formidable. The White House and Republicans stress corporate tax cuts as the backbone of their plan. Democrats are insisting on new help for the unemployed.
In deciding when to date a recession, the Dating Committee pays special attention to four factors: employment, personal income, manufacturing and trade, and industrial production.
Generally, the common definition of a recession says it requires two quarters of decline in the real gross domestic product, the nation's output of goods and services. But the NBER's Dating Committee notes specifically that it gives "relatively little weight to real GDP because it is only measured quarterly and it is subject to continuing, large revisions."
Nonetheless, Ben Bernanke, another member of the committee and a professor at Princeton University, suspects GDP will shrink in the current quarter. That would mean the present recession would meet that popular definition since GDP shrank 0.4 percent in the third quarter.
The NBER committee, for its part, notes that employment reached a peak in March and declined subsequently. Industrial production peaked in September 2000, falling by 6 percent over the next 12 months. This surpassed the average decline of 4.6 percent in the previous six recessions - a fact often noted by the National Association of Manufacturers.
Real personal income, on the other hand, has performed better than in the previous recessions. It has not reached a peak yet. Continuing fast growth in productivity and sharp declines in the prices of imports, especially oil, raised purchasing power even as employment fell. Perhaps new data will show that income fell in October, speculates Mr. Bernanke.
One unusual feature of this recession, says Mr. Zarnowitz, is that it has spread around the globe. Japan has entered its third recession in the past 10 years. Europe's economy is weak, with Germany in especially bad shape.
But the Federal Reserve has lowered interest rates dramatically this year. Congress already has passed some tax cuts.
"So far this hasn't worked" to revive the economy, says Zarnowitz. But he expects it will.