How Do We Know if We’re in a Recession?
Some voices from the right have accused the Biden administration of trying to “redefine” how a recession is measured. How will we know if the U.S. economy has entered a recession?
The debate around defining recessions kicked off with a White House blog post from July 21 which said the common definition — two consecutive quarters of GDP contraction — was “neither the official definition nor the way economists evaluate the state of the business cycle.” Instead, the White House pointed to the measure used by the National Bureau of Economic Research: “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.”
Several voices in the Biden administration have argued that the U.S. economy remains relatively strong despite inflation, pointing to low unemployment and other factors. However, GDP contracted at an annual rate of 1.6% in the first quarter of 2022, and second quarter GDP data is expected Thursday. If GDP contracted again, that could put the common recession definition at odds with the official economic definition.
Perspectives on measuring recessions often aligned with partisan biases. While a Washington Examiner (Lean Right bias) editorial firmly argued that the “true standard” of a recession was two consecutive quarters of GDP contraction, an analysis in The New York Times (Lean Left bias) said this definition was “unofficial” and instead pointed to the formal economic definition.
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From the CenterHere’s how to know if we’re in a recession, and it’s not what you think
Everyone who cares knows that recessions happen when there are two consecutive quarters of negative growth — everyone, that is, except for the people who actually decide when the economy is in recession.
For those folks, at the National Bureau of Economic Research, the definition of recession is much squishier.
Officially, the NBER defines recession as “a significant decline in economic activity that is spread across the economy and lasts more than a few months.” The bureau’s economists, in fact, profess not even to utilize gross domestic product, the broadest measure of...
From the LeftThe Biden administration’s preemptive pushback on ‘recession’
It’s quite possible that, by the end of this week, we could be having yet another hugely important political debate over the definition of a word: “recession.”
The Bureau of Economic Analysis on Thursday is set to release the second-quarter gross domestic product (GDP) numbers. And if they’re negative, that will mark two consecutive quarters in which the economy has contracted — something that is generally understood to mean a recession.
How real and politically sensitive is that possibility? Real enough that the Biden administration is seeking to preempt it.
From the RightTop Trump WH economist slams Biden administration's 'recession' spin
Casey Mulligan, former chief economist for the Council of Economic Advisers (CEA), criticized the Biden administration for attempting to redefine what a recession constitutes.
Several underlying indicators suggest the U.S. is heading towards an economic downturn despite President Biden's insistence that the economy is strong, Mulligan — who served in the Trump administration between 2018 and 2019 — told FOX Business in an interview. In recent days, several top White House officials have downplayed the technical definition of a recession and argued that two consecutive quarters of negative gross domestic product (GDP)...