When a Recession Ends

The recession is over. It's official. Even the BBC and the FT say so.

But, does one quarter of positive growth really mean that the recession is finished? I posed this question some time ago, before the end of the first dip. Then I argued for three alternative ways of judging the end of a recession:

• the level of at GDP rather then the rate of change
• when the annual growth rate turns positive
• quarterly growth to return to (or exceed) the trend rate (0.6% a quarter)

How are we doing on those criteria?

The level of GDP is still more than 3% below the peak reached before the recession. If anyone tells you that the recession has finished, tell them that the depression goes on. According to the ONS the annual growth rate is zero, "GDP in volume terms was estimated to have been flat in Q3 2012, when compared with Q3 2011". Only the third criterion is met, the quarterly rate is above trend. 

So on two out of three of my criteria, it is still too early to call the end of the recession.