Business Cycle Dating Committee, National Bureau of Economic Research

December 22, 1992

NBER Business Cycle Dating Committee
Determines that Recession Ended in March 1991

CAMBRIDGE, December 22, 1992 -- The Business Cycle Dating Committee of the National Bureau of Economic Research met by conference call yesterday. The committee maintains a chronology of the U.S. business cycle that is widely used in the analysis of business conditions. In its meeting, the committee determined that the U.S. economy reached a trough of activity in March 1991.

Previously, the committee had determined that the economy reached a peak of activity in July 1990. The eight-month period between July 1990 and March 1991 is a recession in the NBER's chronology. The committee thus determined that the recession ended in March 1991 and that an expansion began at that time.

The committee had waited to make the determination of the trough date until it was confident that any future downturn in the economy would be considered a new recession and not a continuation of the recession that began in July 1990. The committee noted that the broadest measure of economic activity -- gross domestic product in constant dollars -- had finally surpassed its previous peak by the third quarter of 1992. Only by December did the overall pattern of economic activity appear to be strong enough to warrant the determination of the trough date.

The behavior of the economy in 1991 made the determination of the trough particularly challenging. Two important monthly indicators related to the production and sales of goods -- industrial production and manufacturing-trade sales in constant dollars -- had unambiguous troughs in early 1991 (in March and January, respectively). Two other monthly indicators had declined to close to their minimum values by early 1991, but continued to decline slightly for the rest of 1991. Real personal income reached its trough in November 1991, at 0.07 percent below its level in April. Employees on non-agricultural payrolls reached its trough in January 1992, also at 0.07 percent below its level in April. Total hours of all non-agricultural employees reached its trough in April. The choice of March 1991 as the trough date was based primarily on the fact that various averages of the monthly indicators reached clear troughs in that month.

The NBER also maintains a quarterly chronology of the U.S. business cycle. It determined that the most recent trough occurred in the first quarter of 1991.

Committee members are: William Branson, Princeton University; Martin Feldstein, NBER President; Benjamin Friedman, Harvard University; Robert Gordon, Northwestern University; Robert Hall, chairman, of Stanford University; Geoffrey Moore, Columbia University; and Victor Zarnowitz, University of Chicago.