Who does the official dating of recessions

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Macro paper, Laurent Ferrara, Valérie Mignon and I asked why employment growth was so sluggish given GDP growth (post here).

The current situation seems to have reversed that puzzle.

Of course, we examined levels (using a nonlinear error correction model), while the current discussion is centered around growth rates. Figure 1 depicts the employment and growth trends since 2007.

Figure 1: Log real GDP (blue), and nonfarm payroll employment (red), both normalized to 2009Q2=0.

Figure 9: Log real GDP (blue), and nonfarm payroll employment (red), real final sales (black), and aggregate hours worked (pink), all normalized to 2009Q2=0.The idea behind the expenditure approach is that the output that is produced in an economy has to be consumed by final users, which are either households, businesses, or the government.Therefore, the sum of all the expenditures by these different groups should equal total output—i.e., GDP.Measured by traditional yardsticks for growth, like gross domestic product, the American economy definitely looks weak.View it through the prism of hiring and employment, however, and the economy seems surprisingly strong.

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