Economic expansions end, and recessions begin, on a rhythm that repeats across generations. The National Bureau of Economic Research has dated 13 US recessions since February 1945, per its cycle table last updated on March 14, 2023. The average contraction in that span ran 10.3 months. The average expansion lasted 64.2 months.
The rhythm matters for operating plans, because downturn timing shapes hiring, pricing, and investment choices. Subscription revenue rides the same wave, as the short history of newsletter businesses shows. Working guides to these moves sit in the site’s Business News section.
Who decides when a recession starts
The Business Cycle Dating Committee of the NBER maintains the US record of peaks and troughs. The NBER is a private nonprofit research group. Its working definition calls a recession a significant decline in economic activity, spread across the economy, and lasting more than a few months. The group treats depth, diffusion, and duration as overlapping tests. A sharp drop in one can offset softer readings in another. Readers following this should also see Supplier diversification has a real price.
No fixed formula exists. The committee leans on monthly measures of real activity. Real personal income less transfers and nonfarm payroll employment carry the most weight in recent decades, per the NBER’s cycle dating page. Quarterly GDP and gross domestic income enter the quarterly calls. For readers after business cycles explained in plain terms, this dated record is the standard reference.
The postwar record at a glance
The NBER’s expansions and contractions table, last updated on March 14, 2023, records the postwar extremes:
- Longest contraction: 18 months, from December 2007 through June 2009, per the NBER table.
- Shortest contraction: 2 months, from February 2020 through April 2020, per the same table.
- Longest expansion: 128 months, from June 2009 through February 2020, per the same table.
The table shows why peaks cluster in some decades. The 1970s and early 1980s produced four downturns. One ran 16 months, from November 1973 through March 1975. Another ran 16 months, from July 1981 through November 1982. The 1990s and the 2010s each held a single recession, per the same record. Seven of the 13 postwar contractions ran 10 months or fewer, per the same table. This connects to our earlier piece, Dallas Fed surveys put local pressures on the record.
Inventories and credit drive the swings
Two forces turn a slowdown into a cycle. Inventory swings come first. Firms order goods against expected sales. When demand cools, they cut orders faster than sales fall, so factory output drops before consumers feel much pain. Restocking works the same way on the rise.
Credit adds the second force. Spending on construction and durable goods reacts to financing costs. Lenders tighten standards once losses appear, and the pullback compounds. Both channels run in reverse on the way up, when cheap credit and restocking speed the recovery. Economists track both channels because each moves output faster than wages or prices do.
Why turning points get dated late
The committee dates turning points after the fact. It waits until enough data exist to avoid major revisions, so peak and trough calls arrive months late, per the NBER dating page. A peak is called only once a recession seems sure. A trough is called only once recovery is underway.
The pandemic cycle showed that patience. The committee placed the peak in February 2020 and the trough in April 2020, per its chronology. It still called the episode a recession, because the drop in activity was deep and widespread. Revisions can move a call, so the group rewrites its record only with strong evidence.
Conclusion: cycles repeat, dates arrive late
The record yields two durable facts. Expansions are the normal state of the US economy. Since 1945 they have run about six times longer than contractions, per the NBER table updated March 14, 2023. Recessions stay brief, and their official dates arrive months after the damage. Planning beats forecasting, and the NBER record remains the scoreboard.
