Unofficial arbiter of dating considers extending most recent downturn; possible boon for Bush.
January 22, 2004: 11:14 AM EST
NEW YORK (CNN/Money) - The committee of economists that sets the dates of U.S. recessions and expansions is considering moving the starting point of the latest recession to as early as November 2000 -- which, if true, could provide some political cover for President Bush.
The business cycle dating committee of the National Bureau of Economic Research, a private research group, will soon decide whether or not to change the starting date of the latest recession from March 2001, its current estimated starting month, NBER spokeswoman Donna Zerwitz told CNN/Money.
The story was initially reported Thursday by the Wall Street Journal, though Zerwitz said NBER economists had been discussing the changes since a meeting early in January.
"The committee is waiting for more data at this point in time, and there might be changes to the historical dates of other recessions," Zerwitz said, noting the committee has set dates for every U.S. recession since 1854.
She added that, while the revision could be as dramatic as moving the starting date of the recession all the way back to November 2000, it could also be less drastic -- moving the date back to February 2001, when non-farm payrolls, as measured by the Labor Department peaked, for example.
The earlier date would be good news for Bush, who took office in January 2001 and is seeking re-election this year, as he could argue the recession began during the administration of his predecessor, President Clinton.
Zerwitz said the NBER's discussion about changing the date of the recession was not politically motivated.
For many years, the NBER dating committee has estimated the peaks and troughs of the economy using four basic indicators: job growth, industrial production, consumer income and the volume of sales by manufacturers, wholesalers and retailers.
In October 2003, however, the committee announced it was also using estimates of monthly gross domestic product (GDP), the broadest measure of the economy, generated by Macroeconomic Advisers, a private research firm.
The committee formerly paid less attention to GDP, simply because the Commerce Department only tracked GDP on a quarterly basis. The monthly GDP data now available are more helpful, Zerwitz said.
Though the committee has said those montly numbers "are fairly noisy and are subject to considerable revision," it also considers them helpful in tracking the economy's cycles. And in time, revisions by Macroeconomic Advisers to older monthly GDP estimates could inspire the NBER to change its cycle dates, Zerwitz said.
Another common definition of a recession is two consecutive quarters of a negative rate of growth in gross domestic product (GDP), the broadest measure of the economy. GDP shrank in the first three quarters of 2001, and the Commerce Department recently said revised benchmark data showed GDP also shrank in the third quarter of 2000.
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