NBER’s Hall Says Payrolls Make It ‘Pretty Clear’ Recession Over

NBER’s Hall Says Payrolls Make It ‘Pretty Clear’ Recession Over


April 3 (Bloomberg) -- The biggest increase in employment in three years makes it “pretty clear” the deepest U.S. recession since the 1930s has ended, said the head of the group charged with making the call.

Payrolls rose by 162,000 workers last month, the third gain in the past five months and the most since March 2007, figures from the Labor Department showed yesterday in Washington.

“I personally put lots of emphasis on employment,” Robert Hall, who heads the National Bureau of Economic Research’s Business Cycle Dating Committee, said in an interview. “I would say ‘pretty clear’ is a good description” for whether the economic contraction has ended, he said.

Among the top indicators the group uses is payrolls, according to its Web site. The government revised the January and February job count up by a combined 62,000, putting the March gain at 224,000 after including the updated data.

“It’s great news that employment has finally stopped shrinking,” Hall, a Stanford University professor, said.

Today’s report showed the payroll count from the government’s survey of businesses and the employment numbers from a separate survey of households have both been heading higher, Hall said.

“That is looking better now,” he said. “I think the odds favor a continuing expansion in employment, but I don’t have great confidence.”

Growth Outlook

The economy probably grew by 2.8 percent in the first quarter of 2010, according to the median estimate of a Bloomberg News survey of economists last month, after a 5.6 percent pace of expansion in the fourth quarter of 2009.

The committee waits to make a declaration until it can precisely date the start or end of a contraction, which usually takes six to 18 months, according to its Web site.

“Our committee will continue to operate in a deliberate model,” Hall said.

The panel has lagged declarations of other economists partly because it depends on payrolls, among the last economic indicators to show growth. The National Association for Business Economics in October 2009 said the recession had ended, while Federal Reserve Chairman Ben S. Bernanke said in September 2009 the contraction “very likely” had stopped.

“Speaking personally, it now seems very clear that the recession has ended,” said another panel member, Harvard University professor Jeffrey Frankel, in an interview yesterday. Frankel has said the most likely date for the recession’s end would be midyear of 2009.

Economic output has been rising since around June or July, he said, while employment has only recently started to rise.

source: bloomberg.com