The “Non-Technical Recession” Recession of 2001

I recall a conversation sometime in May 2001, when on the staff of the CEA, where the topic was how all the indicators were all pointing toward avoiding a recession. Indeed, using the oft-cited rule of thumb of two-consecutive quarters of negative GDP growth, there was no 2001 recession (although there was by this criterion a period of about 2 years, 2002-04, when there was). Consider this graph of GDP, by different vintages:

Figure 1: GDP in billions Ch. 1996$ SAAR. NBER defined peak and trough dates at dashed lines. 6/29/22 GDP calculated dividing nominal GDP by GDP deflator rescaled to 1996=100. Source: BEA via ALFRED, NBER, and author’s calculations. 

The first reading of GDP at then end of April 2001 allowed people to breathe a sigh of relief – q/q annualized growth was around 2%:

Figure 2: Quarter-on-quarter annualized real GDP growth. NBER defined peak and trough dates at dashed lines. Source: BEA via ALFRED, NBER, and author’s calculations. 

That positive reading remained true through the second and third releases. The advance reading for 2001Q2 was also positive. This remained true through the second and third releases, and only in Q3 did the advance reading go negative, and remain so. However, the advance Q4 reading (1/30/2002) was positive — so there was no two-consecutive-quarter string of negative readings.

Only with the advance 2002Q2 release — incorporating the annual revision — did we get consecutive negative readings, in this case three quarters, starting Q1 running through Q3. The annual revisions adjust the preceding 5 years of GDP estimates (see here).

However, every five years, the BEA undertakes comprehensive revisions, incorporating the latest data. This once again changed the contours of GDP – as shown in Figure 1 and Figure 2. As the most recent series show, there are no consecutive quarters of negative growth. And yet, the NBER declared a recession running from (peak-to-trough) March 2001-November 2001, 2001Q-2001Q4 (recession announcement November 26, 2001, expansion announcement, July 17, 2003).

For a previous discussion of GDP revisions, see here, and here. None of the foregoing should be taken to mean that one can’t use GDP to determine recession dates. In fact, Jim Hamilton’s real-time indicator of recession (see this post for extended discussion) does not rely upon the most recent quarter’s data, but the next to most recent.

44 thoughts on “The “Non-Technical Recession” Recession of 2001


    Annual GDP in 2001 was 1%. GDP surged after the covid lockdowns. That is for sure. Real retail sales is still is above the 2009-19 trendline. So is sales being flat a recession, or a correction???? Did employment ever catch up to all that consumption as over hiring????

    This is the problem with GDP. It’s revisions tell the story. Even employment has levels of revisions.


        Yeah, but 2020-21 is special and we know consumption boomed like nothing in recent history.

  2. ltr

    January 15, 2018

    Personal Consumption Expenditures, 1992-2022

    (Percent change)

    [ Personal consumption assuredly did not “boom” in 2001, even with a significant tax cut and a significant military spending increase. Personal consumption decreased in 2001, and also in 2002. ]

  3. ltr

    July 2, 2022

    Major project of China’s west-to-east power transmission program starts operation

    A major part of China’s west-to-east power transmission program kicked off operation Friday, a further boost to the coordinated development among different regions.

    With its transmission line stretching about 2,080 km, the Baihetan-Jiangsu 800-kilovolt ultra-high-voltage (UHV) direct current power transmission project transmits clean hydropower from the southwestern province of Sichuan to east China’s economic powerhouse Jiangsu Province.

    It is the world’s first UHV direct current power transmission project using a new approach that combines the conventional direct current and flexible direct current technologies, according to the State Grid Corporation of China.

    Starting construction in December 2020, the mega project spans five provincial regions, with many parts built into the mountains.

    “We have worked against high altitude, low temperatures and complex landscapes to meet the schedule,” said Zhang Mingdi, a project manager participating in the construction of the project’s Sichuan section.

    China’s west-to-east power transmission program seeks to balance the country’s electricity supply and demand in different regions. It transmits the electricity surplus in western regions rich in power-generating resources to eastern regions which need more electricity to power economic activities.

    Sichuan is home to the project’s powerhouse Baihetan, the world’s second-largest hydropower station. The Baihetan-Jiangsu project is expected to accelerate the transformation of Sichuan’s natural resources into economic benefits, bringing investment totaling about 100 billion yuan (about 14.92 billion U.S. dollars) in electricity and other sectors.

    The electricity market’s volume of Jiangsu, the power transmission’s major receiver, is expected to top 10 million kW during the 2021-2025 period.

    The project has a power transmission capacity of 8 million kW, generally meeting the demand of Jiangsu’s power demand, said Wu Wei, vice director of the construction department of State Grid Jiangsu Electric Power Co., Ltd….

    1. ltr

      May 8, 2022

      World’s fastest rotor for pumped storage hydropower plant in operation

      The fifth unit of the Changlongshan pumped storage hydropower station in east China’s Zhejiang Province passed its 15-day tests and started operation on May 4, according to China Three Gorges Corporation (CTGC).

      Unit 5 of the pumped power station has a rated capacity of 350,000 kilowatts (kW), or 350 milliwatts (mW), and a rated speed of 600 revolutions per minute – the world’s fastest of its kind.

      The station has six pumped storage power units designed and installed in the plant, with a total rate capacity of 2100 mW that can generate nearly 2.5 billion kilowatt hours (kWh) of electricity each year.

      Pumped storage hydropower (PSH) is a type of hydroelectric energy storage. It is a configuration of two water reservoirs at different elevations that can generate power as water moves down through a turbine from one to the other.

      The fact that it also requires power to pump water back into the upper reservoir means a PSH functions like a giant battery as it can store power and then release it when needed….

  4. ltr

    Central to the control of energy prices in China, has been the development of multiple energy sources, the ability to store energy and national ultra-high voltage transmission networks. Building the ultra-high voltage transmission networks is critically important.

    1. ltr

      July 2, 2022

      China’s largest coal-based ethanol project put into trial operation

      China’s largest coal-based ethanol project with an annual output of 500,000 tonnes was put into trial operation in Yulin City in northwestern Shaanxi Province on Thursday.

      The project uses coal as raw material to produce ethanol and other chemical products, and it can convert 1.5 million tonnes of coal annually. Experts said three tonnes of grain can produce one tonne of ethanol, saving 1.5 million tonnes of bio-ethanol raw grain every year when in full service.

      “Compared with the traditional method of producing ethanol with grain fermentation, the project firstly saves food for us and solves the problem of food security, and it is also of important and strategic significance for the high-quality utilization of coal in the future,” said Li Xianfeng, deputy director of the Dalian Institute of Chemical Physics, Chinese Academy of Sciences….

    1. Moses Herzog

      Like most relationships, I gather it’s more complex than it looks. If they can keep their marriage together then that is one of the very few ways I would respect her. The mobile phone video that surfaced of her talking to her daughter is not very convincing in the mothering dept though. But sometimes people are better spouses than they are parents. That happens also.

  5. JohnH

    Jeffrey Sachs has an excellent piece at Consortuim News (apparently other, more mainstream outlets have found him not fit to print. No censorship in America? Hah!)

    “ The neocon track record is one of unmitigated disaster, yet Biden has staffed his team with neocons. As a result, Biden is steering Ukraine, the U.S. and the European Union towards yet another geopolitical debacle. If Europe has any insight, it will separate itself from these U.S. foreign policy debacles.”

    And so, we, the people have to endure yet another pointless and futile war, this one with significant blowback…

    1. pgl

      Funny you left off his first sentence:

      “The war in Ukraine is the culmination of a 30-year project of the American neoconservative movement.”

      Why did you omit this? After all you have been blaming Biden and not Putin all along. Of course you are nothing more than a Putin parrot. Sachs may be a good economist but when he begins an oped with such a disgustingly stupid line – the rest of his chirping is not worth reading.

      1. Moses Herzog

        @ pgl
        I’m not so certain the first sentence is so bad. Did the MAGA attempted extortion of Zelensky for political dirt on a U.S. presidential candidate’s family have nothing to do with encouraging Putin to invade Ukraine?? America signaling the Russian government that political dirt was more precious to America than the sovereign boundaries of Ukraine. Did I not witness that donald trump attempted extortion of Ukraine’s government (including witness’s transcripts of the phone call) over a period of months or was it a bad dream I had after too much Taco Bell??

        Neoconservatism is pretty closely related to Reaganism, and in my opinion Reaganism is just an early form of MAGA. The same as QAnon is an offshoot of MAGA. People can say these 4 ideologies are unrelated if they like. I suggest to anyone that belongs to any of these 4 closely related ideologies and the fact they are closely related makes them feel dirty, just tell the truth the 4 ideologies are incestuous with one another and take more showers. Perhaps “Lava” brand soap applied vigorously.

        1. pgl

          “Did the MAGA attempted extortion of Zelensky for political dirt on a U.S. presidential candidate’s family have nothing to do with encouraging Putin to invade Ukraine?”

          I sort of doubt it was much of the driving force. After all Putin and Trump teamed up in 2016.

          Putin was delighted that Trump was dismantling NATA and he is very angry that Team Biden is putting NATO back together.

          1. Moses Herzog

            It’s debatable, but the timing of both happenings has me thinking trump’s extortion attempt was at least a factor involved in Putin’s decision to attack.

          2. Moses Herzog

            @ pgl
            I think similar to me you keep your ear pretty close to the ground on news items. Thought on the small chance you had missed this you’d take an interest. ABC interview of Liz Cheney. Similar to Mike Pence at the U.S. Capitol, Cheney has surprised me (nearly shocked me) in how well she has come through here in flying colors. I underestimated her character. I still can’t believe I am even typing that.

   <<—– 9 minutes total

            Gun attack in Copenhagan Denmark tonight. I'll let readers who are interested search out links on their own.

          3. Moses Herzog

            BTW, I think it would be hard for me, based on the fact she’s conservative to vote for Liz Cheny based on her presumed entire platform if she ran. BUT…….. I would consider voting for her if she ran for President. It would depend on who won the Democrat nomination. Just as an example, if the other choice was Hillary, I wouldn’t even have to think about it. I would choose Liz Cheney. Copmala Harris?? Again I would choose Liz Cheney over her. It would depend on the other party nominee. But I would consider voting for Cheney for President. She has the intelligence, inner strength, and willingness to “go against the grain” in a leader that I want to see.

          4. Barkley Rosser


            I respect Liz Cheney a lot and am impressed and pleased at how she is conducting herself in this Jan. 6 investigation and more broadly in standing up to Trump and his supporters. I also appreciate that she strongly opposes the Putin invasion of Ukraine.

            But on most other issues, many of them very important to me and I think many of them to you as well, I strongly disagree with her. We know that you have a fanatical and irrational hatred of Clinton and Harris, but they also hold these positions you admire in Chaney, although obviously it is easier to for them to do so politically. But I have no problem in supporting either of them for POTUS over Cheney on th basis of other issues and positions of importance.

            Would yeu really prefer to have her appointing justices to the SCOTUS than either of them? REally?

            We really get it that your hatred of various older powerful women is completely off the wall, and I think most of us paying attention get why that is the case, and also that a main reason you engage in frothingly off-the-wall attacks on me is that have dared to say out loud what it is that most of us know, I suspect even those who are sort of your pals here.

            BTW, Happy Fourth of July, yoiu all!

          5. Moses Herzog

            @ Barkley Junior
            You’ve happened to catch me in a good mood, where even the festering puss that avalanches out of your brain can’t bother me at the moment. Clinton and Harris are empty receptacles that spew out clichés that idiots like you want to hear, and then think Clinton and Copmala are your “friend”. Because you’re so stupid, I have to give you a male example so as to thwart your inability to have a fair intellectual fight without crying out for a “safe space” for your ego to hide. Do you remember John Edwards, the man screwing around on his wife after she was diagnosed with cancer?? These are the type people you love, who (male or female) I have no time for, the same as I have no time for you. I have no time for phonies and frauds, for if everyone is a phony like you, Copmala, Hillary Clinton etc ad nauseam then we have no land stakes, boundary pegs, or triangulation markers from which to reference or truly know reality. We just have morons like you running around telling people what they think gets them farther along in life, with no underlying morality or basis in facts.


            James Kwak back in early 2010: “Some of you know that I initially supported John Edwards in the Democratic primary because I thought he was a progressive dressed up in moderate’s clothing. I didn’t support Obama at first because of the opposite reason: I thought he was a moderate (all that talk about bridging divides and moving beyond partisanship) that many people thought was a progressive. (I don’t blame Obama for this; I think it was more people projecting onto him what they wanted to project.) Obviously Edwards would have been catastrophic; had he won the nomination, the most important person in the country would be John McCain’s doctor.”

            BTW, Barkley “There Will Be No Invasion of Ukraine by Putin” Junior, who did you endorse in 2008 for U.S. President?? Do you remember 14 years ago?? Let me help your weak and feeble brain:

            I supported President Obama, but not because he was younger than Edwards.

            So Yes, I like Cheney (55 years old) over Copmala Harris (57 year olds) as a presidential candidate. I guess I have to look age numbers up now because an elderly prof in Virginia with early dementia gets so butt-hurt over age issues.

          6. Menzie Chinn Post author

            Moses Herzog: I don’t recall Barkley Rosser asserting support for John Edwards.

            I would also say that if you are troubled by women wearing scarves, you would be plenty troubled were you to visit Europe where it seems de rigueur to have such an accessory (for women and many many men).

          7. Moses Herzog

            @ Menzie
            I honestly don’t know if you’re trying to add kindling to the fire here for the blog’s sake or what is going on here?? I showed you the link where Barkley supported Edwards. You’re not getting lazy going down the rabbit hole on these links are you?? Do you not trust a UCSB link now?? It’s there, plain as the daytime sky is blue.

            As regards scarves. I like scarves on women. I have given female friends of mine scarves that I probably loved/cherished the look of more than they did. The problem is when “said person” seems to care more about scarves and personal fashion than the basic functions of the central bank at which they work. Shall I copy/paste her comments related to yield curves again?? Happy to Sir.

            “but we are not here to close spreads . This is not the function or the mission of the ECB. There are other tools for that, and there are other actors to actually deal with those issues.” From the lady herself. Menzie, if you think that is an intelligent statement coming from the head of the ECB, or ANY developed nation’s central bank……. I have no fathomable response to that.

          8. Menzie Chinn Post author

            Moses Herzog: Ah, my apologies. Don’t read posts very closely at all, but I searched using the Econbrowser search facility, didn’t find the words together. In any case, I think I still have an Kerry Edwards poster in my house somewhere.

          9. Barkley Rosser


            No, he has me on that one. I did briefly support Edwards and signed that statement he links to. Needless to say at that time it was not publicly known what Edwards was pulling with his wife, and when that came out in fact I switched to supporting Obama. Effectively I more or less went along the same path as James Kwak, whom Moses professes to admire, so I am not quite sure why he thinks this is such a “gotcha” on me to jump up and down ranting and denouncing. How was I different from the supposedly wonderful Kwak?


            It is glaringly obvious that you are lying about “having no time” for me. You obviously spend yuuuuge amounts of time obsessing about me and trying to dig around to find something you can slam me with, like my early 2008 endorsement of the ultimately embarrassing John Edwards, hot stuff. I am not sure how you even have time to go digging up stuff on all those women you hate so much., you are spending so much on going after me.

          10. Barkley Rosser

            This has probably shot its wad, but I must say I am seriously mystified why Moses Herzog thought he was scoring any points here by digging up my having signed this statement in Jan. 2008 supporting John Edwards at a time before anybody knew publicly about his bad behaviors, the revelations of which later would sink his candidacy. It was not only James Kwak, whom Moses admires, who liked Edwards, but the other 29 economists on that list I signed contain a lot of pretty respectable, mostly quite progressive folks. Some of them were later advisers of Bernie Sanders, whom Moses has professed to worship the ground he walks on, with Hillary’s great crime that she defeated him.

            As Menzie notes, Edwards had been the Dem VP nominee in 2004 and looked pretty good at that time. Nobody found out about his bad behaviors then, and VP candidates get a lot of vetting. He was also in Jan. 2008 clearly taking more progressive positions than the other Dem candidates, which is why so many of those 30 on that list were quite progressive, with some of them later Bernie advisers. He seemed both more progressive and more vetted and experienced with his VP run than Obama. But then he crashed.

            So, Moses, you really had a fit about this. But this seems to be yet another one of your attempted slams at me that simply amounts to a big nothing. I am not the least bit ashamed of having supported Edwards at the time I did when none of us knew of his bad behaviors.

          11. Barkley Rosser

            As far as Christine Lagarde goes, she is sort of like Jay Powell in not having a background in economics. So here policy decisions are not really being driven or made by her but reflect the broader set of board members at the ECB plus its staff. I do not think she is badly intentioned, and the slams at here and her scarves are simply way out of line. But then so are most of Moses’s slams at the various women he hates.

            Let us see, here is a list, sort of, with their ctimes.

            Hillary Clinton, ooh, she beat Bernie the meanie!
            Elizabeth Warren, how dare she accurately claim to have some small amount of Native American Indian ancestry, the “Pocahontas”!
            Kamala Harris, how dare she prosecute people for pot when a DA and then turn around to support its legalization, not to mention being mean to Joe Biden in their first debate (although Moses has at times claimed Biden is “senile” along with me and Nancy Pelosi).
            Nancy Pelosi, yeah, “senile” and likes fancy ice cream too much!
            Neera Tanden, another one who said mean things about Beloved Bernie (whom I voted for over Hillary in VA primary in 2016, btw), not to mention she had the temerity to hit some man in the chest!!!!!!
            And now, Christine Lagarde with her scarves and not “closing yields” when Moses things that should be done!

          12. Barkley Rosser

            Now that this thread is going into obscurity I shall send Moses over the edge to accuse me of having the plague or maybe polio or Infant Death Syndrome by leaking something from 2008, since he brought it up.

            I did not initially support Obama, but in fact I gave him advice, advice he took to his advantage then. No, not going to say what it was, except that maybe it had something to do with Rosser’s Equation, yeah, mine, :-). Those were the days, :-).

      2. JohnH

        Sachs: “ Since the 1950s, the U.S. has been stymied or defeated in nearly every regional conflict in which it has participated.”

        But pgl thinks that it’s a splendid idea to participate in yet another pointless and futile war…this one with significant economic blowback, just so the US can strut around claiming to be king of the mountain, top dog.

        Well, Democrats will get what they deserve come November. And, sadly, the American people will pay the price for throwing the bums out. But, hey, this is the greatest nation earth…just ask the neocons and their fellow travellers, the liberal interventionists. Count pgl as one of the cheerleaders for this stupidity. And count Biden as just plain stupid for getting us into this mess.

        1. pgl

          And you think the Ukrainians should be enslaved by Putin. Of course Putin’s little poodle has to honor his masters wishes at every turn. Maybe Putin will give little Johnny a bone.

          1. JohnH

            Let’s see…how did Iraq and Libya and Afghanistan turn out? About the best that the US can do is to destroy a country to “save” it.

            pgl is under some bizarre illusion that the US’ pointless and futile wars somehow benefit the people of the country where war is waged. And at what cost to the American people is this war being waged?

            What an idiot!!!A total sucker for propaganda about “noble,” altruistic war…

          2. macroduck

            Uh, Johnny? Pssst! Johnny, listen…before you embarrass yourself any further, listen: Ukraine is fighting to defend itself against Russia. The U.S. isn’t fighting in Ukraine. We have no troops in Ukraine. Sachs has used the word “intervention” to conflate Afghanistan and Iraq and Vietnam with Ukraine, but they are different cases.

            Sachs also said “nearly” because the U.S. has, in fact, enjoyed a few successes. We backed Afghanistani resistance against the U.S.S.R. and didn’t send troops. (Sound familiar?) We ended a genocide in the Balkans. No-fly over Libya (which Putin hated). Granada (for what it’s worth).

            Arguing from poorly defined categories and an unquantified “nearly” is polemics, not reasoned discussion. Will the U.S. or its allies gain from supporting Ukraine? Too soon to tell. Will Ukraine benefit? Good lord, let’s hope so. A great deal will depend on wise handling of relations with Ukraine and her neighbor, Russia and Russia’s allies, over time. One lesson from Carter’s support of the Afghan resistance was that neglect after success is dumb.

            You obviously don’t know any more about how foreign policy works than about how economics works. Both take more effort, and less “gotcha!” than you seem able to handle.

          3. pgl

            July 3, 2022 at 2:46 pm

            I have noted this many times before. I actively protested the invasion of Iraq. Funny thing – we never saw JohnH out there protesting this illegitimate war. When I noted that I also actively protested against the Vietnam War, JohnH reluctantly had to admit he did not.

            So little cheap shots like this blatant lie of his are signs that the commentator could care less about a real conversation. Of course this dishonest little whining is exactly what we would expect from Putin’s pet poodle.

        2. Noneconomist

          Hey John: will you be flying out to DC to participate in the big anti war match to “Get Us Out of Ukraine”? Must be tens of thousands who share your sentiments. Will you be speaking? Will you be signing autographs?
          OTOH, were you admiring yourself in the mirror,preening, when you confused who exactly is a cheerleader for stupidity and a total sucker for propaganda?

          1. pgl

            I have seen ‘Get Moscow Out of Ukraine’ chants. Of course, JohnH wants Putin’s pigs to stay in Ukraine raping their women. JohnH is that kind of guy.

    1. macroduck

      She has refused Menzie’s repeated requests to stop polluting. That should justify a least a partial ban.

      If ltr (or her masters) offered the rest of the world uncensored access to China’s citizens, she’d have a right to complain.

      1. pgl

        ltr on occasion offers up useful comments but yea anything that even mentions China should be filtered out.

  6. macroduck

    Off topic, but related –

    The world economy faces a risk right now which, while perfectly obvious, doesn’t get much press; the capacity for widespread economic policy coordination looks pretty weak.

    Various alliances among democracies (avoiding the use of “Western Alliance”, given the importance of Japan, Australia, New Zealand, South Korea, Taiwan…) have shown remarkable cooperation in confronting Russia’s war of aggression against Ukraine. Those same countries have also engaged in coordinated efforts to restrain China’s hegemonic ambitions in the South China Sea an elsewhere. By most accounts, this performance is better than had been expected at the outset.

    Now, partly as a result of Russia’s aggression, economic conditions around the world are deteriorating. In prior episodes of economic stress, there has been widespread coordination and cooperation among the big economies to maintain stability. Given that some of the main players are more at odds over geopolitics than has been the case in decades, cooperation and coordination seems much less likely. The various democraties are likely to do their best, but that’s a smaller set of countries than have coordinated efforts in past episodes.

    China has in the past been an anchor during financial and economic stress, using fiscal and foreign exchange policy to limit transmission of global shocks. Now, China is a likely source of shock. Russia has mostly been a destabilizing influence since the collapse of the Soviet Union, but not on a scale like the present one. The elevation of partisanship to a sort of religion (and religion to partisanship) means the U.S. will be hobbled in efforts at a domestic response to recession, much less international coordination.

    Prior to Covid, recent global recessions have funancial disruption near or at the heart of the problem. For good or ill, it is possible to conjur financial solutions at the stroke of a pen. Real-side shocks are a different matter; it is not possible to conjur wheat or petroleum in like manner.

    I see mostly forecasts of a modest recession when recession is the forecast, but I see little account taken of the possible lack of coordination beyond the democratic allies. I also see little attention outside of international agencies to the risk of spill-over from food and fuel shortages in poorer countries. Here, too, coordination is needed. Recession will make coordination on food, fuel and related migration more difficult. Geopolitical conflict will compound that difficulty.

  7. ltr

    July 2, 2022

    Nigerian president welcomes berthing of first ship at new deep seaport

    ABUJA — Nigerian President Muhammadu Buhari on Saturday welcomed the successful berthing of the first ship at the Lekki Deep Seaport, the country’s first deep seaport under construction in Lagos, the country’s economic hub.

    The vessel, ZHEN HUA 28 departing from China’s Hong Kong, delivered on Friday three ship-to-shore cranes and 10 rubber-tired gantry cranes that will help in the evacuation of cargoes from vessels to the shore, Buhari said in a statement by his media advisor Femi Adesina.

    The Nigerian leader congratulated all stakeholders in the maritime sector on the feat, saying that his approval of four new seaports in the country, including the Lekki Deep Seaport, was hinged on growing the economy.

    According to the statement, the decision is also aimed at creating massive job opportunities, foreign investment inflows, and trade facilitation.

    The Lekki Deep Seaport, constructed by the China Harbour Engineering Company Ltd, is the largest seaport in Nigeria, and one of the biggest in West Africa. It is designed to have the capacity to handle a significant volume of liquid and dry bulk un-containerized cargoes.

    The current state of the seaport’s construction which is nearing full completion will make the operationalization of the facility a reality before the end of the year, Buhari said, reassuring Nigerians of his commitment to sustain investments in these new assets….

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