Giving Us More DOM Synonym: How the NBER Committee Assesses Economic Health

The National Bureau of Economic Research (NBER) Business Cycle Dating Committee, also known as the recession scorekeeper, is responsible for determining when the United States enters a recession. But how do they make this assessment? In this article, we will explore the key indicators that the committee uses to evaluate the health of the economy.

One way to assess economic health is by looking at various recession-indicator variables. Figure 1 shows the trend in four of these variables - real income minus transfers, real spending, industrial production, and employment - relative to their values in April 2020, which marked the trough of the last recession. Notably, there are no fixed rules or thresholds that trigger a determination of decline, although the committee has given more weight to real personal income less transfers and payroll employment in recent decades.

Another important factor is the timing of government statistics, which can take time to report. As such, the committee cannot officially designate a recession until after it starts. The National Bureau of Economic Research defines a recession as 'a significant decline in economic activity that is spread across the economy and that lasts more than a few months.'

So, what are the key variables that the committee typically tracks? These include real personal income minus government transfers, employment, various forms of real consumer spending, and industrial production. Based on these data, it is unlikely that the decline in GDP in the first quarter of this year-even if followed by another GDP decline in the second quarter-indicates a recession.

Instead, both official determinations of recessions and economists' assessment of economic activity are based on a holistic look at the data-including the labor market, consumer and business spending, industrial production, and incomes. In other words, it's not just about two consecutive quarters of falling real GDP; it's about the overall health of the economy.

In conclusion, assessing the health of the economy is a complex task that requires looking at various indicators and data points. The NBER committee uses a combination of recession-indicator variables, government statistics, and economic data to determine whether the United States is in a recession or not. By giving us more DOM synonym, this article has provided a deeper understanding of how the committee makes its assessment.

Giving us more dom synonym