According to their website, the National Bureau of Economic Research (a private organization, the “official” arbiter of recession start and end dates) has not declared and end to the recession. But the charts provided by the Federal Reserve System (for example, see the recent Mises article by Frank Shostak), the “shaded blue” time frames indicate the recession ended in June '09. What is going on here? Have the government overseers declared an end to the recession or not?
The NBER officially dates the end of the recession, largely based on increases in Gross Domestic Product (GDP). The GDP numbers are often revised after they are issued, so the NBER waits several months after an increase in GDP before officially declaring the end of a recession. The Fed is basing its opinion that the recession is over on current GDP numbers, which still might be revised.
Keep in mind that government spending is part of GDP, so the end of a recession can be driven solely by an increase in government spending. It doesn’t necessarily mean the end of hardships in the private sector.
Well, the documents the Fed release are related to how the Fed is currently making policy (forward looking). This goal is distinctly different from the NBER’s role in dating recessions (backward looking).
What this tells us is, whether the recession has “officially” ended or not, the Fed might be making decisions as if the worst was over. That may mean they will start putting more of an eye on inflation than unemployment.
But who knows. The Fed is pretty secretive about how they make decisions. But that does seem to be Paul Krugman’s latest gripes–that some people are worried about inflation when unemployment is in the double digits and is not forecasted to return to previous levels for several years.