“The leading authority on business cycles is expected to announce as soon as Monday that the U.S. economy is officially in recession,” writes Greg Ip and John D. McKinnon in today’s Wall Street Journal.

“After the business-cycle dating committee of the National Bureau of Economic Research held a conference call Friday, committee Chairman Robert Hall said an announcement likely would be made Monday. Mr. Hall, a Stanford University economist, declined to say what decision was reached.”

“Meanwhile, President Bush and Senate Democrats remained deadlocked over the contents of a proposed economic-stimulus package. Two top advisers to Mr. Bush appeared on Sunday talk shows, along with Senate Majority Leader Tom Daschle, but the two sides exhibited no progress in their standoff over whether to fill the package with tax cuts sought by Republicans or spending favored by Democrats.”

“Several members of the NBER committee said before Friday’s call that they expected the panel to determine that a recession began in March, though some cautioned it isn’t a foregone conclusion. Such a declaration could add urgency to Washington’s debate over the stimulus package.”

“Administration officials stepped up their calls for passage of the bill. The GOP-controlled House has passed a measure that largely mirrors Mr. Bush’s priorities, but the closely divided Senate has seen a Democrat-backed bill bog down.”

“The Senate needs to get its act together,” Treasury Secretary Paul O’Neill said Sunday on CNN.

“Mr. Daschle promised another attempt at passing a bill, but offered no new compromise. Instead, he re-emphasized the Democrats’ already-established priorities of spending for homeland security and new benefits for the unemployed. “I think it would be a tragedy if we left this session of Congress without helping the unemployed at all,” Mr. Daschle said on Fox News Sunday.”

“He also singled out for criticism the GOP’s drive to repeal the corporate alternative minimum tax. Both Mr. O’Neill and Bush economic adviser Lawrence Lindsey largely avoided the subject, focusing instead on Mr. Bush’s other major business proposal: depreciation breaks to speed investment.”

“Mr. Lindsey also warned that failure to pass another pending bill–addressing government involvement in terrorism insurance–could hurt the economy by leaving many businesses and homeowners in technical default on their mortgages if their coverage isn’t renewed. Meanwhile, Mr. O’Neill talked up weekend consumer sales as a possible sign of economic strength, but misspoke in describing sales as being up 4% from the same period in 2000. Same-store sales did increase, but only about 2.4%, according to one retail-sales measure, TeleCheck Services Inc.”

“Despite the renewed attention the economic-stimulus package is getting, some economists speculated that an NBER declaration also could throw cold water on the issue by showing it comes too late.”


“The NBER, a nonprofit organization of academic researchers, has been studying business cycles since the 1930s and has been widely recognized since the early 1960s as the authority on when recessions begin and end. Its business-cycle dating committee consists of six academic economists who have been studying economics and business cycles for decades.”

“The NBER defines a recession as a significant, widespread decline in activity lasting more than a few months, as seen in industrial production, employment, real (inflation-adjusted) income and wholesale and retail trade. It doesn’t use the popular rule of thumb of two or more consecutive quarters of declining real gross domestic product — the total value of goods and services produced in a nation. Determining a recession date says nothing about how long or how deep the downturn ultimately may be; the committee will have to meet again when it thinks it has enough evidence to call the recession’s end date.”