US recession not pronounced `dead'

The head of an elite panel that decides US business cycles said on Sunday the recession may have ended as early as last November, but his group won't formally declare it over until it rules out a renewed slump.

"We're not ready to do that," Robert Hall, chairman of the National Bureau of Economic Research's business-cycle dating panel, told a meeting of business economists here.

"A lot will depend on the [payroll] number that comes out on Friday. If it's negative, that's definitely going to cause us to pause," Hall later told reporters.

The Labor Department will on Friday report employment data for the month of September. Economists surveyed by Reuters expect on average payrolls to have edged ahead by 5,000 while the unemployment rate is seen rising to 5.9 percent from 5.7 percent in August.

The economists who make up the Business Cycle Dating Committee. often wait many months before pegging peaks and troughs in the economy. The group, widely regarded as authoritative, held off until December 1992 to declare that March 1991 marked the end of the 1990-1991 recession, for instance.

At Sunday's meeting of the Cambridge, Massachusetts-based National Association for Business Economics, Hall said if payroll growth was very strong for two more months, however, then that might give the NBER panel a basis for calling an end to the recession.

"November is probably the earliest date we'd pick and March is the latest date," he said of the recession's end, assuming the US economy continues growing from here.

Hall quipped that the committee gets a lot of criticism in the media for not being faster with its calls and added that his group takes a cautious approach to its decision-making.

"The thing we care about most is not getting it wrong," Hall said.

He said one "cloud" over the process is the as yet unanswered question of whether the US economy might slip back into a renewed downturn.

If that happens, he said, the panel would then have to determine whether such a renewed downturn would constitute a separate recession or would be considered part of the contraction that began in March 2001.

While a loose rule of thumb is that a period with two consecutive quarters of contraction in gross domestic product qualifies as a recession, the NBER uses different indicators and criteria as guideposts. A recession must also meet the famed three Ds: it must have sufficient depth, dispersion and duration.

"There's a real cloud over this two recession, one recession question. We're just going to wait ... If the economy were to turn negative and to meet the three Ds again starting today, we'd have a close call about whether that's one recession or two," Hall said.

"If the economy were to expand and to continue the expansion of output we have seen and the very modest expansion of employment that has occurred to date, we would then place the trough somewhere at the end of 2001 -- November and December would be candidates ... [March] would probably be the latest we'd consider it."