Recession of 2001
A peak in business activity occurred in the U.S. economy in March 2001. A peak marks the end of an expansion and the beginning of a recession. The determination of a peak date in March is thus a determination that the expansion that began in March 1991 ended in March 2001 and a recession began. The expansion lasted exactly 10 years, the longest in the National Bureau of Economic Research [NBER] chronology.
A recession is a significant decline in activity spread across the economy, lasting more than a few months, visible in industrial production, employment, real income, and wholesale-retail trade. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough. Between trough and peak, the economy is in an expansion. Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades.
Because a recession influences the economy broadly and is not confined to one sector, the committee emphasizes economy-wide measures of economic activity. The traditional role of the committee is to maintain a monthly chronology, so the committee refers almost exclusively to monthly indicators.
Employment reached a peak in March 2001 and declined subsequently. The figure for October is the first to reflect the effects of the attacks of September 11. Through October, the decline in employment has been similar to the average over the first 7 months of recessions. The cumulative decline is now about 0.7 percent, about two-thirds of the total decline in the average recession.
A peak in industrial production. occurred in September 2000 and the index declined over the next 12 months by close to 6 percent, surpassing the average decline in the earlier recessions of 4.6 percent. For 5 months, until March, the economy outside of manufacturing was expanding faster than manufacturing was shrinking, so that total employment continued to grow.
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