There is no official definition of recession, something that makes it problematic to identify one. For some, two consecutive quarters of negative GDP growth constitutes a recession but that definition is not universally accepted and does not by itself encapsulate sufficient granularity to distinguish between a regular slowdown in growth and something more painful. In the US, the National Bureau of Economic Research (NBER) has become the official arbiter of when a recession has taken place, although they typically only make the call several months after the start of the recession. Nonetheless, it is useful to look at the criteria the NBER considers when making its judgement call.
The NBER does not explicitly reveal a quantitative methodology nor a finite list of indicators it looks at. However, it does identify five data series that it looks at in making its judgement. These are:
- Real manufacturing and trade sales
- Industrial production
- Real personal income less transfers
- Average of payroll and household employment
- Monthly GDP