Economy watch group drops talk of recession

Bloomberg News Service

WASHINGTON — A research group that monitors U.S. business cycles has dropped a previous statement that a recession may have begun.

Recent economic data "continue to suggest that the only substantial declines in real activity in the U.S. economy are in manufacturing," The National Bureau of Economic Research said in a report posted this week on its Internet site.

"Broader aggregates, such as employment and real personal income, haven't fallen significantly or at all," the group said.

Unlike previous reports starting May 15, the newest one does not include a line saying that data suggested the "possibility" of a recession.

The bureau, based in Cambridge, Mass., has a committee whose members decide when recessions and expansions begin and end. The group's Business Cycle Dating Committee defines a recession as a "significant decline" throughout the economy. The slowdown must last more than a few months and shows up in industrial production, employment, real income and wholesale-retail trade.

The committee's six members gather whenever they think the economy has changed direction. The committee doesn't announce when it meets, to avoid arousing public concern.

The previous reports that mentioned a possible recession also noted that "the economy has not declined nearly enough to merit a meeting of the committee."

The new report, dated July 10, updates the data on U.S. employment with the latest figures for June payrolls released by the Labor Department last week. The data showed payrolls decreased by 271,000 in the last three months.

"These declines are small in comparison to the total decline in the 1990-1991 recession," the report said. During that recession, payrolls fell by about 1.9 million workers.

The bureau called the monthly employment report "the single most reliable indicator" of a recession. The bureau also signaled a shift in emphasis toward keeping a closer tab on real personal income and away from real retail sales.