Living Information

BROOKS JACKSON, CNN Correspondent: Last March, eToys was filing for bankruptcy, Cisco Systems was announcing layoffs, the Federal Reserve was slashing interest rates for the third time, President Bush, only a few weeks in office, was lobbying through a huge tax cut. And now we know the U.S. was really entering a true recession.
Looking back, the boom started, slowly at first, during the last Bush Administration, gained steam under Bill Clinton, spawned a dot-com craze and talk of a new economy not governed by old rules of supply and demand, sent stocks soaring and crashing, and lasted exactly 10 years, making it the longest since records began in 1854.
But the recession actually started, according to the NBER’s Business Cycle Dating Committee, when the total number of jobs in the U.S. ? total employment ? started going down last March. That, they said, was the key factor. The media usually define a recession as six months of negative economic growth. But the Committee has a more refined definition, calling for a significant decline in activities spread across the economy, lasting more than a few months, visible not only in employment, but also in industrial production, real income after adjusting for inflation, and wholesale-retail trade.
The attacks of September 11th may have been the critical factor, even though they came months after an economic slowdown had begun. The announcement comes amid signs the worst may already be over, as the President, himself, restated after Monday’s recession announcement.
[GEORGE BUSH, Former U.S. President] We’ve got low interest rates, we’ve got reasonable energy prices, we’ve got good tax policy in place, and we’ve got the framework for economic recovery.

JACKSON: How long will the recession last? Until the end of World War I, the average recession lasted nearly two years, but they’ve grown shorter in recent years. Since World War II, the average recession has lasted 11 months, and this one already has lasted eight months. Shorter recessions and longer booms, an encouraging historic trend. Brooks Jackson, CNN, Washington.