Understanding the Delay in Recession Announcements

May 3, 2025 - 19:15

Economists are cautioning that an official declaration of a recession might not occur for several months, or even years. The National Bureau of Economic Research (NBER), the organization responsible for making such determinations, employs a comprehensive range of indicators and retrospective data to assess economic downturns. This method means that even if the economy shows signs of decline, the NBER may wait until there is sufficient evidence to confirm a recession.

The NBER evaluates various factors, including gross domestic product (GDP), employment rates, and consumer spending, among others. This thorough approach can lead to delays in announcing a recession, causing uncertainty among businesses and consumers. As economic conditions fluctuate, analysts and policymakers closely monitor these indicators, trying to gauge the health of the economy. The lack of immediate clarity can create challenges for decision-making, as stakeholders await a definitive assessment from the NBER. In the meantime, the public remains anxious about the potential implications of an economic downturn.