US Business Cycle Expansions and Contractions: Historical Data

Note: Contractions (recessions) start at the peak of a business cycle and end at the trough.

BUSINESS CYCLE REFERENCE DATES DURATION IN MONTHS

Peak Trough Contraction Expansion Cycle

Quarterly datesare in parentheses

Peak to Trough

Previous trough to this peak

Trough from Previous Trough

Peak from Previous Peak

June 1857(II)October 1860(III)April 1865(I)June 1869(II)October 1873(III)March 1882(I)March 1887(II)July 1890(III)January 1893(I)December 1895(IV)June 1899(III)September 1902(IV)May 1907(II)January 1910(I)January 1913(I)August 1918(III)January 1920(I)May 1923(II)October 1926(III)August 1929(III)May 1937(II)February 1945(I)November 1948(IV)July 1953(II)August 1957(III)April 1960(II)December 1969(IV)

December 1854 (IV)December 1858 (IV)June 1861 (III)December 1867 (I)December 1870 (IV)March 1879 (I)May 1885 (II)April 1888 (I)May 1891 (II)June 1894 (II)June 1897 (II)December 1900 (IV)August 1904 (III)June 1908 (II)January 1912 (IV)December 1914 (IV)March 1919 (I)July 1921 (III)July 1924 (III)November 1927 (IV)March 1933 (I)June 1938 (II)October 1945 (IV)October 1949 (IV)May 1954 (II)April 1958 (II)February 1961 (I)November 1970 (IV)

--18832186538131017181823132423718141343138111081011

--3022461834362227201824213319124410222721508037453924106

--4830783699743537373642444643355128364064638848554734117

----405450521016040303542395632366717404134939345564932116

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November 1973(IV)January 1980(I)July 1981(III)July 1990(III)March 2001(I)December 2007 (IV)

March 1975 (I)July 1980 (III)November 1982 (IV)March 1991(I)November 2001 (IV)June 2009 (II)

166168818

3658129212073

52642810012891

47741810812881

Average, all cycles:1854-2009 (33 cycles)1854-1919 (16 cycles)1919-1945 (6 cycles)1945-2009 (11 cycles)

16221811

42273559

56485373

55* 49**5366

* 32 cycles** 15 cycles

Source: NBER (National Bureau of Economic Research)

The determination that the last expansion began in June 2009 is the most recent decision of the Business Cycle Dating Committee of the National Bureau of Economic Research.

Announcement dates:The June 2009 trough was announced September 20, 2010.The December 2007 peak was announced December 1, 2008.The November 2001 trough was announced July 17, 2003.The March 2001 peak was announced November 26, 2001.The March 1991 trough was announced December 22, 1992.The July 1990 peak was announced April 25, 1991.The November 1982 trough was announced July 8, 1983.The July 1981 peak was announced January 6, 1982.The July 1980 trough was announced July 8, 1981.The January 1980 peak was announced June 3, 1980. Prior to 1979, there were no formal announcements of business cycle turning points.

The NBER does not define a recession in terms of two consecutive quarters of decline in real GDP. Rather, a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. For more information, see the latest announcement from the NBER's Business Cycle Dating Committee, dated 9/20/10 (as reproduced in abbreviated form below).

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Business Cycle Dating Committee Announcement, National Bureau of Economic Research, September 20, 2010

September 20, 2010 - The Business Cycle Dating Committee of the National Bureau of Economic Research met yesterday by conference call. At its meeting, the committee determined that a trough in business activity occurred in the U.S. economy in June 2009. The trough marks the end of the recession that began in December 2007 and the beginning of an expansion. The recession lasted 18 months, which makes it the longest of any recession since World War II. Previously the longest postwar recessions were those of 1973-75 and 1981-82, both of which lasted 16 months.

In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month. A recession is a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. The trough marks the end of the declining phase and the start of the rising phase of the business cycle. Economic activity is typically below normal in the early stages of an expansion, and it sometimes remains so well into the expansion.

The committee decided that any future downturn of the economy would be a new recession and not a continuation of the recession that began in December 2007. The basis for this decision was the length and strength of the recovery to date.

The committee waited to make its decision until revisions in the National Income and Product Accounts, released on July 30 and August 27, 2010, clarified the 2009 time path of the two broadest measures of economic activity, real Gross Domestic Product (real GDP) and real Gross Domestic Income (real GDI). The committee noted that in the most recent data, for the second quarter of 2010, the average of real GDP and real GDI was 3.1 percent above its low in the second quarter of 2009 but remained 1.3 percent below the previous peak which was reached in the fourth quarter of 2007.

Identifying the date of the trough involved weighing the behavior of various indicators of economic activity. The committee designated June as the month of the trough based on several monthly indicators. The trough dates for these indicators are:

Macroeconomic Advisers' monthly GDP (June)The Stock-Watson index of monthly GDP (June)Their index of monthly GDI (July)An average of their two indexes of monthly GDP and GDI (June)Real manufacturing and trade sales (June)Index of Industrial Production (June)Real personal income less transfers (October) Aggregate hours of work in the total economy (October)Payroll survey employment (December)Household survey employment (December)

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The committee also maintains a quarterly chronology of business cycle peak and trough dates. The committee determined that the trough occurred in the second quarter of 2009, when the average of quarterly real GDP and GDI reached its low point.

The current members of the Business Cycle Dating Committee are: Robert Hall, Stanford University (chair); Martin Feldstein, Harvard University; Jeffrey Frankel, Harvard University; Robert Gordon, Northwestern University; James Poterba, MIT and NBER President; James Stock, Harvard University; and Mark Watson, Princeton University. David Romer, University of California, Berkeley, is on leave from the committee and did not participate in its deliberations.

Movement of Interest Rates and Asset Prices over the U.S. Business Cycle

The first two charts below show the relationship of (1) interest rates, both short term and long term and (2) stock prices to changes in business cycles. Note that stock prices have lead the last two business cycle recessions. Thus, this may be another useful leading indicator of future economic activity.

As shown on the interest rate chart, short term rates tend to move over a wider range than do long term rates over the course of a complete business cycle. This is also evident when viewing yield curves over a long period of time; the short end of the yield curve exhibits a greater range of movements than the intermediate and longer end of the curve. This is illustrated in the series of charts (3, 4 and 5) at the end of this reading which depict yield curves in the U.S. over various periods of time.

Chart 1: The Business Cycle and Interest Rates

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Chart 2: The Business Cycle and Stock Prices

Chart 3: U.S. Corporate Yield Curves, 1900 - 1942

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Chart 4: U.S. Treasury Yield Curves: 1961 - 1966

Chart 5: U.S. Treasury Yield Curves: 2004, 2005, 2006 and 2007

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