Kristie Engemann and Michael Owyang of St Louis Fed have a nice short crisp note on the topic.
The note says twp things.
- 2007-09 recession is much like the 1991 and 2001 recessions with jobless recoveries. It has interesting graphs comparing recessions from 1949-82, 1990-01 and current recession. In the graphs we see how recessions have differed on GDP and employment performance.
- It says NBER seems to be putting more weight on GDP than employment. If it had looked at employment it would have said recession ended in Jun 2009. NBER Business Cycle Dating Committee (BCDC) is asymmetric in its approach as it uses employment for identifying peaks but GDP for troughs:
For the recessions since 1990, though, it appears the BCDC placed more weight on output variables than employment when determining the official end dates of these recessions. If, instead, the BCDC had placed more weight on employment than output, the official end dates would have been much later.
For example, the BCDC declared December 2007 as the beginning of a recession, noting that several indicators had peaked around then but that GDP and real gross domestic income growth were more ambiguous. None the – less, the BCDC chose December 2007 because that date coincided with the clear peak of payroll employment. The BCDC declared June 2009 as the end of the recession, noting that, although employment did not hit a trough until December 2009, most other indicators (namely, the main monthly output measures) had hit a trough in June.
This example demonstrates the asymmetric predictive content of employment dynamics for identifying peaks and troughs in the business cycle, suggesting perhaps that employment dynamics are given more weight in identifying peaks and less weight in identifying troughs.