The Biden administration’s preemptive pushback on ‘recession’

Technically speaking I think they are correct. I’m not offering an opinion as to whether we are or aren’t.

Recession Definition

 

However, the National Bureau of Economic Research (NBER), which officially declares recessions, says the two consecutive quarters of decline in real GDP are not how it is defined anymore. The NBER defines a recession as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

 

Business Cycle Dating Procedure: Frequently Asked Questions



Q: The financial press often states the definition of a recession as two consecutive quarters of decline in real GDP. How does that relate to the NBER's recession dates?

A: Most of the recessions identified by our procedures do consist of two or more consecutive quarters of declining real GDP, but not all of them. In 2001, for example, the recession did not include two consecutive quarters of decline in real GDP. In the recession from the peak in December 2007 to the trough in June 2009, real GDP declined in the first, third, and fourth quarters of 2008 and in the first and second quarters of 2009. Real GDI declined for the final three quarters of 2001 and for five of the six quarters in the 2007–2009 recession.

Q: Why doesn't the committee accept the two-quarter definition?

A: There are several reasons. First, we do not identify economic activity solely with real GDP, but consider a range of indicators. Second, we consider the depth of the decline in economic activity. The NBER definition includes the phrase, “a significant decline in economic activity." Thus real GDP could decline by relatively small amounts in two consecutive quarters without warranting the determination that a peak had occurred. Third, our main focus is on the monthly chronology, which requires consideration of monthly indicators. Fourth, in examining the behavior of production on a quarterly basis, where real GDP data are available, we give equal weight to real GDI. The difference between GDP and GDI—called the “statistical discrepancy”—was particularly important in the recessions of 2001 and 2007–2009.

 

It’s a victimless recession so far. Unemployment is 3.6% and there are 11M openings with 5M people looking.

Last quarter real GDP was -1.6% which is not bad with the inflation and I bet this quarter will be similar.

Almost all commodities have dropped in prices since last quarter, many substantially like lumber and copper.

If you own a home the inflation you are paying is more than offset by your housing equity which has gone up $184,000 since 2020. Americans average net worth is an all time high.

Biden needs a better marketer. If you’re not employed, making more money than ever, and watching your home equity skyrocket… that’s your fault.

 

You libs are going to be really twisting yourselves into knots deflecting the recession. It's comical.

 

Deflection

 

Repo rates are a leading indicator of looming recessions. Auto loan bubble is imploding.

 

It’s not a marketing issue and that is a terrible spin.

 

Victims are coming. GDP declining and the Stock Market is tanked. Corporations are going to get nervous and start layoffs soon IMO since other costs are increasing exponentially.

Inflation is probably driving some of the drop because of ppl cutting back due to high prices. Inflation has just grown month over month, even with interest rate hikes.

Another sign of recession, falling prices of goods needed to sustain economic activity.

Great, another bubble about to be popped with skyrocketing interest rates. My Net worth has fallen >$50K since last Fall just because of the Stock market....when the floor falls out of the RE market, it will really get ugly.

Making more money is nothing but smoke when you are paying more than the equivalent in higher prices, and if you didn't sell your home last quarter and somehow found a nicely priced rental with a long term contract, you could be in for a rude awakening.

What Joe needs isn't some slick marketer to tell us up is down and down is up (he already has those). What he needs is to wake up and realize that his policies are the equivalent of throwing gasoline on a fire.

 

What policies?

You just posted, what I assume was a serious post, that housing equity is bad cuz it’s a bubble (no it isn’t it’s a supply shortage) and how you wish your stocks were a bubble… both points of view only because they are opposites of where we are and Biden is president. That is insane man.

Your policy quip is entirely unsupported. You couldn’t explain what Biden was doing to throw gas on the fire. We are in a supply shortage man. Nothing will fix that except time. We are not in an excess money driven inflation situation… so what is Biden doing to hurt supply? I’ll hold my breath.

 

Help me understand how Biden has caused inflation in pretty much every country in the world. Perhaps covid and massive spending by gubmnts worldwide had a little something to do with it?

 

We still have a shortage of available housing, much of the recent boom was fueled by cash sales, what makes you think the floor will fall out of the RE market? I can see it slowing down, getting back to normal levels of growth, but that seems different from the floor falling out like it did in 2007-2008.

 

Economically speaking, what defines a recession has always been a bit of a debate. That being said, the numbers are the numbers

 

It’s simple. Loss of consumer confidence coupled with increased nonsensical government regulation leading to corporate distrust and this a wait and see approach with business expansion.

 

And how do you explain inflation worldwide? Did Biden do that too?

 

I don't know how you can have an official recession when unemployment is at 3.6%.

 

How does loss of consumer confidence translate to inflation?