None of which is to say the economy is in great shape, of course. Even though the economy has been expanding for roughly 18 months, employers have been paring the workforce in recent months rather than adding workers as they generally do in an expansion. The nation’s gross domestic product has been inching ahead at a pace of less than 2 percent since late last year, rather than the 4 to 6 percent that is more common after recessions.


Upbeat Bush pushes jobs initiative 

April 7,1917: A day after the United States entered World War I, the Dow began a slide that continued for several months. By year’s end, it had lost 21.6 percent. For the market, the increased economic production for the war, which had begun more than a year earlier, was mitigated partly by the double-digit inflation it generated and general anxiety about the conflict in Europe. By 1918, despite a 20 percent inflation rate, the market headed higher. In 1919, with inflation easing, stocks soared 30 percent.

May 4, 1970: Four days after President Richard Nixon announced the bombing of Cambodia, four students at an anti-war demonstration on the campus of Kent State University were shot and killed by Ohio National Guardsmen. Despite the social upheaval in the country, the economy had done very well during most of the Vietnam years.

Oct. 28, 1929: Encouraged by easy credit and little regulatory oversight, stocks surged from 1921 until September 1929. Then, in the autumn of ’29, steel producers, automakers and several other industries began to sputter, and businesses that had freely extended credit began to cut back. On Oct. 24 - “Black Thursday” - the Dow fell 2 percent. Prices stabilized the next day when J.P. Morgan and other financiers stepped in to buy. But Monday and Tuesday brought a deluge of selling, exacerbated by margin calls. The Crash ushered in the Great Depression. It took 25 years for the Dow to return to its pre-Crash levels.

May 10,1940: After a strong start to the year, investors turned nervous in April when Germany invaded Denmark and Norway. It was in May, though, that the bottom fell out, with the Dow falling 23 percent in two weeks. The downward spiral began on the 10th with the Nazi invasions of Belgium, Luxembourg, Holland and France, and the resignation of British Prime Minister Neville Chamberlain. On May 17, two days after Holland surrendered, the Dow fell 4.7 percent. Four days later, with reports that German troops had reached the English Channel, it fell another 6.7 percent. A build-up in military manufacturing, as the economy emerged from the Great Depression, sent GDP up 8.5 percent in 1940. The Dow ended the year with a loss of 12.7 percent.

Dec. 8, 1941: On Monday -- the day after the Japanese attacked the U.S. naval base at Pearl Harbor in Hawaii -- the Dow industrials fell 4 points to 112.52. The next day, with the United States now formally in World War II, it fell another 3 points. The index fell for the next five months, hitting bottom in April 1942 at 92.92—even as the post-Depression economy was growing at a double-digit, war-mobilized rate. But that growth had kicked up inflation, another worry for investors. Still, by the middle of 1942, the Dow began to edge back, on news of U.S. victories in the Pacific. It ended the year near 120. That same year, GDP grew 18 percent. By the end of 1945 -- the year the war ended -- the index had risen to 192.91. The end of the war, however, tipped the economy into a recession that lasted more than two years.

June 26,1950: Three days before the North Korean army crossed the 38th parallel and attacked South Korea, the Dow began to fall. On June 26, it dropped 10 points to 213.91. Uncertainty about a response to the hostilities led to a sharp decline during the next three weeks. By July 13, the index had lost 12 percent and was trading at 197.46. But on July 19, President Harry Truman announced that the United States would enter the war. His request to Congress for a $10 billion rearmament program boosted stock prices, particularly shares of aircraft, auto, oil, copper and steel companies. The economy grew by nearly 9 percent in 1950, and the Dow gained 17.6 percent that year.

Sept. 26, 1955: News of President Dwight D. Eisenhower’s heart attack over the weekend sent Wall Street reeling on Monday—losing 32 points to close at 455. The classic concerns over leadership during the period of Cold War tension weighed heavily on the market. And the Dow’s strong performance in the prior 21/2 years—up almost 70 percent since Ike’s inauguration—added to Wall Street’s anxiety. What’s more, the post-Korea War economy had turned mildly negative in 1954 and was just building momentum. Still, the event proved fleeting on Wall Street, with the Dow gaining 21 percent for the year.

Oct. 23, 1962: A day after President John F. Kennedy told the nation that Soviet weapons with nuclear capabilities had been placed in Cuba and that the United States was preparing for a possible military response, the Dow fell 1.8 percent. The next day it rallied 3.3 percent and continued to rally for the next month even as the potential for nuclear war loomed. The crisis seemed to have little effect on the economy that year; GDP grew at a 6 percent pace, and the consumer inflation rate was just 1.3 percent.

Nov. 22, 1963: On the Friday that President John F. Kennedy was shot and killed in Dallas, Texas, waves of selling hit the major markets. Within an hour of the news, $13 billion of stock value had been lost on the New York Stock Exchange as investors worried about the succession of leadership and the possible repercussions during a period of Cold War tension. The Dow industrials fell 2.9 percent to 711.50. On Monday, Nov. 25, the stock market was closed for the president's funeral. On Tuesday, the blue chip index jumped 4.5 percent to close at 743.50.Percentage change

Oct. 19, 1973: On Oct. 19, two weeks after the start of the Arab-Israeli conflict known as the Yom Kippur War, Saudi Arabia, Libya and other Arab oil-producing countries announced an embargo on oil exports to the United States. The embargo remained in place until March 18, 1974, when most Arab oil ministers announced its end. Between 1972 and the end of 1974, oil prices quadrupled to about $12 a barrel. In the month before the embargo was announced, the Dow gained 7.7 percent to trade near 960. By Dec. 5, it dropped to 788, and a year later, on Dec. 5, 1974, it was at 587. Inflation jumped from about 3.4 percent in 1972 to more than 12 percent in 1974.

Aug. 8, 1974: Richard Nixon became the first U.S. president to resign from office on Aug. 8, 1974, more than two years after a break-in at the Democratic National Committee offices at the Watergate building in Washington. The next day, Vice President Gerald Ford was sworn in as president. Uneasiness about the state of the nation was reflected on Wall Street.

Oct. 19, 1987: The Dow began 1987 at 1,895.95 and surged almost 44 percent by Aug. 25, when it peaked at 2,722.42. But during the next two months it lost nearly 1,000 points, half of that on Oct. 19, when it plummeted 508 points. That 22.61 percent decline was its biggest one-day drop and is generally thought to have been triggered by: 1) an official's remarks that the dollar's value would be allowed to fall if Germany maintained tight monetary policy; 2) news of a bigger-than-expected trade deficit; 3) a tax proposal that would have reduced merger activity, and; 4) increased U.S.-Iran tensions. Many analysts expected the market shock to have widespread economic reverberations, but GDP rose 3.4 percent in '87 and 4.2 percent the following year.

Jan. 17, 1991: News of the U.S. military's early successes in the war against Iraq electrified investors who had worried about a disruption in Middle East oil supplies and the potential for inflation. But with oil prices tumbling—down $10 a barrel to about $21.44—investors bid up stocks. The Dow soared 114.6 points to close at 2,623. Gold dropped more than $30 an ounce to $397 in New York trading, and Federal Reserve Chairman Alan Greenspan speculated that the drop in oil prices might cut the recession short. But by the end of the year, GDP had contracted by 0.5 percent.

Aug. 19, 1991: News that Soviet President Mikhail Gorbachev had been ousted from office in a coup orchestrated by hard-liners opposed to Gorbachev's glasnost policies sent world markets reeling. The Dow fell 69.99 points to 2,898.03. Germany's DAX tumbled more than 9 percent. "Safe-haven" investments—gold, dollars and short-term U.S. Treasury securities—shot up amid concern the coup could lead to global instability. Oil prices and some defense stocks also rose. Global markets stabilized the next day with the Dow gaining 16 points.

Oct. 27, 1997: The economic domino effect that began during the summer in Thailand with a currency devaluation, and swept through Asia in subsequent months, hit Wall Street in October. Sharp declines in Asian markets, and worries that recession in one part of the world would drag down economies across the globe, sparked a wave of selling on Oct. 27. On that day, the Dow tumbled 554.26 points, exceeding 1987's "Black Monday" point drop. Trade tensions with Japan and warnings from Federal Reserve Chairman Alan Greenspan about "irrational exuberance" in the market were also mentioned as undermining investor confidence. Still, the economy continued to chug along, only halfway through an unprecedented 10-year expansion. GDP rose 4.4 percent in 1997 and another 4.3 percent in 1998.

Sept. 17, 2001: The U.S. equity markets were closed for four business days after the Sept. 11 attacks on the World Trade Center and Pentagon. Elsewhere in the world, however, investors sold heavily. When U.S. markets finally opened, a wave of selling sent stocks tumbling. The Dow fell a record 684.81 points on the first trading day after the attack despite a Fed interest-rate cut and talk of “patriotic buying.” With the economy wobbling even before Sept. 11, the shock of the attacks, combined with the disruption of businesses, 100,000 airline layoffs, likely insurance company failures and dent in consumer confidence contributed to a 14 percent drop in the Dow’s value for the week ended Sept. 21.

The sagging economy was a main factor motivating congressional support for a $350 billion tax cut package signed into law last month. And the Federal Reserve is expected to cut short-term interest rates next month for the 13th time since early 2001 in a bid to fuel growth. But given the excess capacity in the manufacturing sector and weak demand by businesses, the trend of subpar growth is likely to continue for some time said Lakshman Achuthan, managing director for the Economic Cycle Research Institute.

By all the measures other than employment, it is clear the recession ended sometime around the end of 2001, said Achuthan. Personal income is up 1 percent from its cyclical low, and manufacturing and trade sales are up 3.8 percent, he said.

Industrial production, which rose in May after declining for two straight months, also is slightly above its December 2001 low, Achuthan said. Employment, he said, would have hit bottom in December 2002 except for a call-up of some 200,000 military reservists for the Iraq war that distorted the numbers, he said.

“There is some expertise in deciding it, but it is a fairly objective set of criteria,” he said, referring to an ending date for the recession. “It’s not about how we feel. It represents a clustered movement of those four measures as they relate to various peaks.”

Objectively speaking, the economy is in a recovery, he said. “Just politically it can be very tough to say that when the jobs numbers continue to deteriorate, and I think that’s part of the struggle.”

The unemployment rate rose to 6.1 percent last month, its highest level in nearly nine years, and many economists expect the rate to rise further. In a survey released Tuesday, only 20 percent of employers said they had plans to add workers this summer, and 9 percent said job prospects will decline. “This quarter represents the weakest job outlook in 12 years,” said Jeffrey Joerres, chairman and chief executive officer of Manpower, which conducted the quarterly survey.

Treasury Secretary John Snow acknowledged that the jobless rate may rise in coming months but said the prospects for a vigorous recovery are improving steadily.

“I think all the markers are there for a strengthening labor market as growth accelerates this year,” Snow told a Money magazine conference. “ Conditions for this recovery are looking better and better.”

White House press secretary Ari Fleischer said the rallying stock market, which has gained more than 25 percent in the past three months, could be an indication that the economy is poised to accelerate.

After the last recession, the Business Cycle Dating Committee waited 21 months before declaring that economic activity had hit a trough in March 1991. The announcement was made in December 1992, more than a month after voters turned the first President Bush out of office in an election that hinged largely on the economy.

In its latest memo, dated April 10, the committee said it would not make a decision on an ending date for the recession until “it concludes that a hypothetical subsequent downturn would be a separate recession, not a continuation of the past one.”

By most accounts, that point has passed. “The case is fairly strong,” agreed Frankel. “The question is whether we are completely sure.”

Frankel and the others on the panel are well aware that economic forecasters on Wall Street and in academia generally agree that the recession is long over, but the Business Cycle Dating Committee’s mandate is not to be fast, but definitive, he said.

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