This post is a guest contribution by Asha Bangalore * of The Northern Trust Company.

The recession is behind us. Real gross domestic product of the U.S. economy grew at an annual rate of 3.5% in the third quarter after a 0.75 drop in the prior quarter. This is the first increase of real GDP after a string of four quarterly declines. Real GDP has declined in five out of the six quarters of the recession.

The Business Cycle Dating Committee of the National Bureau of Economic Research will make the official announcement after it confirms the turning point based on revisions of economic data. This recession is the longest on record in the post-war period and the deepest also. Real GDP has declined 3.8% from the peak in the second quarter

This post is a guest contribution by Asha Bangalore* of The Northern Trust Company.

The National Bureau of Economic Research (NBER), the arbiter of business cycles, officially announced the trough of March 1991 on December 22, 1992 and the trough of November 2001 on July 17, 2003. Based on this history, there is a lapse of roughly 20 months before the Business Cycle Dating Committee has announced the date of a business cycle trough. Real gross domestic product had risen in the second quarter of 1991 (see chart 1) and the fourth quarter of 2001 (see chart 2) and stayed positive until the next recession.

Real gross domestic product is projected to show an increase in the third quarter of 2009. Real gross domestic product is a quarterly estimate.

The typical Econbrowser reader might not be surprised at the NBER decision -- but some others will. From a May 2008 WSJ article:

"The data are pretty clear that we are not in a recession," Council of Economic Advisers Chairman Edward Lazear told a meeting of editors and reporters from the Wall Street Journal and Dow Jones Newswires.

...

"I would be very surprised if the NBER, looking back at this period, would date this as a recession," Mr. Lazear said. There are even indications that revised first-quarter estimates would be slightly stronger than 0.6%. "The optimists seem to have been closer to right on that than the pessimists," he said.

Just to reiterate, that quote is from May 2008.

Here's a picture of GDP and gross domestic income (as suggested by Jim in this post, and noted in the BCDC announcement).

The Business Cycle Dating Committee of the National Bureau of Economic Research announced today that the eleventh U.S. postwar recession began in December of 2007.

As has often been the case historically, the announcement itself is a bit anticlimactic, in that pretty much everybody had already reached the same conclusion. I was interested to see that the Business Cycle Dating Committee explained the apparent non-recessionary behavior of real GDP in 2008:Q1-Q2 just as we did last September in terms of the statistical discrepancy between GDP and GDI. From the NBER:

The committee believes that the two most reliable comprehensive estimates of aggregate domestic production are normally the quarterly estimate of real Gross Domestic Product and the quarterly estimate of real Gross Domestic Income, both produced by the Bureau of Economic Analysis. In concept, the two should be the same, because sales of products generate income for