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Home > Blogs > Here's the Deal > Archives > 2009 > May > 21 > Entry
Gutsy claim: The recession is over
According to Robert J. Gordon, an acclaimed macroeconomist and professor at Northwestern University, the recession is over.
And Gordon, one of seven members of the elite Business Cycle Dating Committee of the National Bureau of Economic Analysis, should know. That committee is the group that decides officially, for the record books, when recessions begin and end.
But what makes him think this one is over now?
MSN Money reported today, May 21, that Gordon bases his findings on an indicator that he says the committee never even looks at: claims for unemployment benefits — or jobless claims.
According to Gordon’s research, in every recession since 1974, the peak in jobless claims came within weeks of the bottom of the recession.
The writer of the MSN Money story, Donald Luskin of The Wall Street Journal, said that Gordon has really just made the simple observation that the peak in the four-week moving average coincides perfectly with the ends of recessions.
And Luskin said that looking at the data as of May 14, the four-week moving average of claims (preadjustment) was down 4.3 percent, so the early April reading is looking more and more like a real peak.
Luskin added: “I charted the data to prove it to myself, and he’s right.”
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