The recession is over, but the unemployment rate is still 10%. These seemingly contradictory statements beg the question: how is a recession officially defined? The answer, according to marketwatch.com, is that recessions are officially defined in the U.S. by the National Bureau of Economic Research.

The NBER defines a recession in the context of the overall U.S. business cycle: "A recession is a period between a peak and a trough... During a recession, a significant decline in economic activity spreads across the economy and can last from a few months to more than a year." 

According to marketwatch.com, "the NBER uses four monthly indicators: payroll growth, real income growth, industrial output and real business sales" to monitor the business cycle. One explanation for why the recession has been declared over by many economists--including President Obama's economic advisor, Larry Summers--is that the unemployment rate declined last month and GDP increased in the third quarter of 2009.  

The unemployment rate went from 10.2% to 10% between October and November. In the third quarter of 2009, GDP increased by an annual rate of 2.8%, compared to a -0.7% decrease in the second quarter.

While nearly 8 million more people are unemployed now than when the recession started in December 2007, officially things are looking up. The economy is still gloomy (11,000 jobs lost in November), but I'll take any bright spot I can get. 

--Jens