These headlines this morning make it sound like Europe's economy is up and running again:
— "Euro Area Exits Longest Recession on Record." (Bloomberg News)
— "Euro Zone Emerges from Recession." (The Wall Street Journal)
— "Euro Zone Economy Grew 0.3% in 2nd Quarter, Ending Recession." (The New York Times)
They're all based on the news that Eurostat, the keeper of economic statistics for the European Union, says GDP grew 0.3 percent within the EU's borders from the end of March through June.
The stories may turn out to be right. But, unfortunately, reports of the European recession's death are (to borrow from Mark Twain) greatly exaggerated.
As Olli Rhen, Eurostat's vice president, writes on his blog: "I hope there will be no premature, self-congratulatory statements suggesting 'the crisis is over.' " He calls the GDP report only another sign of "a potential turning point in the EU economy."
The quick conclusion by some economists and some in the news media that a slight rise in one quarter's GDP means a recession is over ignores how experts figure out when an economy is either in a significant downturn (a recession) or enjoying steady growth (an expansion).
In Europe, just as in the U.S., the official arbiter is a committee of economic researchers who look at much more than just quarterly GDP data. As the European Centre for Economic Policy Research says of its business cycle dating committee's work:
"First, we do not identify economic activity solely with real GDP, but use a range of indicators, notably employment. Second, we consider the depth of the decline in economic activity. Recall that our definition includes the phrase, 'a significant decline in activity.' "