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The U.S. economy began contracting in late 2007, and the downturn spread and became global through 2008. While the recession's depth and form varies across regions, few parts of the worldwide economy are unaffected. Moody's Economy.com tracks the indicators every day, and updates the forecast as new data become available. What do we mean by recession?

Media reports and economics textbooks often define recession as two consecutive quarters of negative GDP growth. While this is the conventional wisdom, it is not quite accurate, at least in the U.S. In fact, the definition is more complex and subtle than that. The Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) dates the peaks and troughs of the economy's growth; over the decades this activity has made it the de facto arbiter of recession.

The NBER panel defines recession as a "significant decline in economic activity spread across the economy, lasting more than a few months." A number of gauges are used, principally real GDP, income, employment, industrial production and sales, both wholesale and retail.

Unfortunately for forecasters and policymakers, the NBER's methods take time. Because the committee waits until the data are unambiguous, it often decides a recession has occurred months after it has started--and sometimes after it has ended.

(Importantly, the NBER only dates recessions for the U.S. as a whole—not for individual states or metropolitan areas. Moody's Economy.com fills that gap, estimating business-cycle peaks and troughs monthly for all 50 states and 381 metropolitan areas.)