The committee generally also studies another monthly indicator of economy-wide activity, personal income less transfer payments, in real terms, adjusted for price changes.
In addition, the committee refers to two indicators with coverage of manufacturing and goods: (1) the volume of sales of the manufacturing and trade sectors stated in real terms, adjusted for price changes, and (2) industrial production.
The Bureau of Economic Analysis of the Commerce Department compiles the first and the Federal Reserve Board the second.
Because manufacturing is a relatively small part of the economy, the movements of these indicators often differ from those reflecting other sectors.
The figure for October is the first to reflect the effects of the attacks of September 11.
Through October, the decline in employment has been similar to the average over the first 7 months of recessions. Figure 4 shows the movements of real personal income less transfers.
The data continue to show substantial declines in real activity in manufacturing, the sector reflected in the industrial production index, and in real manufacturing and trade sales.
Barbara Rossi is an ICREA professor of Economics at Universitat Pompeu Fabra. She is a CEPR Fellow, is a member of the CEPR Business Cycle Dating Committee and a Director of the International Association of Applied Econometrics.
She previously has been an Associate Professor with tenure at the department of Economics at Duke University, after earning her Ph. She has also been visiting researcher at the University of California—Berkeley, the University of Montreal in Canada, UC San Diego, the Federal Reserve Banks of Atlanta and Philadelphia, Norges Bank, Bank of France, and ENSAE-CREST in France.
Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades.
Because a recession influences the economy broadly and is not confined to one sector, the committee emphasizes economy-wide measures of economic activity.