Economist fears 'nasty' recession is headed our way

"Everyone else is trying to be first and react quickly to new information," says Jeffrey Frankel, a professor at Harvard University who has been on the NBER committee since 1992. "That's not our job. Our job is to be definitive."

Just looking at GDP in real time can be misleading because the data are often significantly revised months, and even years, after their initial release, the NBER says.

And GDP doesn't capture the whole story of the economy, such as changes in employment. During the last recession in 2001, there were two negative quarters of GDP, but they weren't back-to-back.

Today, NBER President Feldstein says there are three main factors that are likely dragging the economy into a recession: the slump in housing construction, turmoil in financial markets and a drop in home values, which makes people more nervous and less apt to spend.

He argues that the Federal Reserve needs to aggressively cut interest rates, and Congress should enact some form of fiscal stimulus, such as one-time tax rebates for consumers to ease the pain.

"If we don't have some offsetting policy, and we move into a recession, then I'm afraid the fact that we've got all these things hitting at the same time could make it pretty nasty," Feldstein says.

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