The employment report released Friday indicating a loss of 4,000 jobs in August and downward revisions for both June and July sent the DJIA spiraling, but as bad as the employment numbers are, they still only represent a period of three months, or one quarter.
Following are statements made by the NBER on the most recent peaks and troughs in our economy.
The November 2001 trough was announced July 17, 2003.
The March 2001 peak was announced November 26, 2001.
The March 1991 trough was announced December 22, 1992.
The July 1990 peak was announced April 25, 1991.
The November 1982 trough was announced July 8, 1983.
The July 1981 peak was announced January 6, 1982.
The July 1980 trough was announced July 8, 1981.
The January 1980 peak was announced June 3, 1980.
An AP article indicates Steve Forbes urged the Federal Reserve to lower their fed funds rate from 5.25 to 4.25, while Philadelphia Federal Reserve Bank president Charles Plosser stated a cut may not be necessary. When the FOMC meets there certainly won't be any shortage of opinions on whether or not the rate should be decreased.
Should the Federal Open Market Committee, FOMC vote for a federal funds rate decrease when it meets on September 18, 2007, it will be the first decrease in the fed funds rate since June 25, 2003 when the rate was cut 1/4 point from 1.25 to 1.00.
Chairman of the Federal Reserve System, Ben Bernanke, is a former member of the Business Cycle Dating Committee of NBER so chances are, whatever decision is made by the FOMC will be the right choice.
© 2007 Patricia L Johnson
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