If I were on the NBER Business Cycle Dating Committee, I would call this a recession:
The U-6 measure of unemployment--reported unemployed plus part-time for economic reasons plus marginally-attached workers all divided by the labor force plus marginally-attached workers--has risen by 1.1 percentage points in the past three months to its current level of 10.3 percent. It now stands 2.2 percentage points above its mid-2000s low, and is just a hair below the maximum reached in the 2001-2003 episode. As you all know, I have been unhappy with the conventional unemployment rate this decade--it has not been telling the same story as the other labor market indicators. U-6 seems to be a better fit to the overall state of the economy.
And by my book, U-6 is now telling us that we are in a recession.
But I am not on the NBER Business Cycle Dating Committee. There's no reason for them not to wait a couple more months before deciding thumbs-up or thumbs-down. And they may not, by their definition, call it a recession.
On the other hand, when I write my history--Macroeconomic Policy in the Age of Central Bankers (Princeton: Princeton University Press, 2025)--this will count as a recession starting in the last quarter of 2007.
The BLS this morning:
Employment Situation Summary: The unemployment rate rose to 5.7 percent, and nonfarm payroll employment continued to trend down in July (-51,000).... Over the past 12 months, the number of unemployed persons has increased by 1.6 million, and the unemployment rate has risen by 1.0 percentage point.... In July, the number of persons who worked part time for economic reasons rose by 308,000 to 5.7 million and has risen by 1.4 million over the past 12 months. This category includes persons who indicated that they would like to work full time but were working part time because their hours had been cut back or they were unable to find full-time jobs.... About 1.6 million persons (not seasonally adjusted) were marginally attached to the labor force in July, an increase of 197,000 over the past 12 months. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 461,000 discouraged workers in July, 94,000 more than a year earlier. Discouraged workers were not currently looking for work specifically because they believed no jobs were available for them....
Total nonfarm payroll employment continued to trend down (-51,000) in July. Thus far in 2008, payroll employment has fallen by 463,000. Over the month, employment continued to decline in manufacturing, construction, employment services, wholesale trade, and the information industry. Health care and mining continued to add jobs over the month...
