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That private, non-profit, non-partisan research organization exists to promote greater understanding of how the economy works. The think tank disseminates economic research among public policymakers, business professionals and the academic community.

Hundreds of the nation's leading scholars in economics and business are NBER researchers, who focus on empirical research. However, their decisions only express timing or date sets – more a sense of the timing of business conditions changes, based on economic indicators. They leave calculating volumetric levels in the cycles to other sources.

Contractions Can Turn in to Recessions or Depressions

Certainly the most traumatic of the four stages of a business cycle is the contraction, when stock prices as well as other asset valuations like real estate properties fall, sometimes precipitously. Unemployment rises, and retail and factory sales drop. A severe contraction is called a recession, while a calamitous one is a depression.

In his famously blunt manner, President Harry Truman expressed his idea of a contraction this way: “When your neighbor loses his job; it's a recession, when you lose yours it’s a depression.”

Economists Use Stock Market Conditions in Analyzing Business Cycles

The stock market is one of the leading economic indicators that business economists evaluate, in forecasting a change in the phase of a business cycle. This is because stock prices tend to move ahead of general business conditions.

Consequently, cycles can cause investors a great deal of pain; or, they can be a reason to break out the champagne.

*The writer holds a CFA designation.

"Although most indicators have turned up," the NBER explained, "the committee decided that the determination of the trough date on the basis of current data would be premature." The press release went on to say,

Many indicators are quite preliminary at this time and will be revised in coming months. The committee acts only on the basis of actual indicators and does not rely on forecasts in making its determination of the dates of peaks and troughs in economic activity. The committee did review data relating to the date of the peak, previously determined to have occurred in December 2007, marking the onset of the recent recession. The committee reaffirmed that peak date.

But one panel member on NBER's Business Cycle Dating Committee thinks otherwise. Economist Robert Gordon, who teaches at Northwestern, says that "it is obvious that the recession is over," according to Bloomberg BusinessWeek. The U.S. "is enjoying strong upward momentum that is evident every day in the announcement of retail sales, service-sector production, and almost everything else."

So, why the delay in declaring the finale to the recession? In a word, caution. "The committee is very careful to guard against surprises," the chairman of the Business Cycle Dating Committee told The Wall Street Journal. "We wait until the numbers come in even if we have a fair level of certainty about what they're going to be," explained Stanford University economist Robert Hall.

Meantime, Ken Goldstein, an economist at the Conference Board, summed up the thinking of some in the dismal science: "While we, the professional egghead economists, feel we are in a recovery and that there is only a small chance we are wrong, consumers are still saving and not spending, as if they think this thing is not completely over."

So, is it over? Probably, although that doesn't mean the danger's gone. It's too early to rule out the possibility of a fresh round of weakness in the economy later this year, as we discussed here. Regardless of what's coming, the clues that suggested the recession was over have been bubbling for nearly a year. As early as June 2009, for instance, we considered the case for thinking that the economic contraction was at or near an end.

Officially speaking, however, it still ain't over till the NBER says it's over. Does it matter? Probably not, although that's debatable too. At least one economist thinks there may be a risk in the absence of the rhetoric that everyone wants to hear. "By not calling an end to the recession," warned MarketWatch.com's chief economist Irwin Kellner, "the NBER might inadvertently cause economic policy to remain too easy too long."