'Recession' might as well be a reason to rejoice

The market isn't supposed to swoon when you tell it what it knew already. Nonetheless it seemed to do precisely that on Monday. After the National Bureau of Economic Research issued a routine report on our recent troubles, the Dow Jones Industrial Average dropped 7.7 percent.

The folks at the NBER must be blinking hard. All they did was say we were in a recession, and date the start of it to December 2007. Since everyone knew something was wrong with the economy, that shouldn't have come as such a shocker. Besides, American recessions aren't that long - a year or so on average.

The Boston scholars who monitor the business cycle for the country may even have told themselves they were supplying evidence of good prospects. After all, as NBER chief James Poterba points out, by its very nature the NBER recession proclamation is a lagging indicator. "We're looking in the rearview mirror here," Poterba said. The NBER doesn't forecast.