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U.S. economy just had a 2nd quarter of negative growth. Is it in a recession?

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Re: U.S. economy just had a 2nd quarter of negative growth. Is it in a recession?

#61

Post by [deleted] »

jaywalk wrote: post #59
bumby wrote: post #38

Earlier quoted context omitted.

But by that same logic, 2020 was a boon year for most Americans. The average savings rate went higher than it's been in a long time.[1] That doesn't mean the economy was in good shape. Point being, there isn't a simple metric to measure something as complex as a national (let alone global) economy. [1] https://www.statista.com/statistics/246234/personal-savings-...

The economy may not have been "in good shape" in 2020 (and I would agree that it was not) but we're talking specifically about a recession here. By no measure were we in a recession in 2020.

[deleted]

Re: U.S. economy just had a 2nd quarter of negative growth. Is it in a recession?

#62

Post by bumby »

jaywalk wrote: post #59
bumby wrote: post #38

Earlier quoted context omitted.

But by that same logic, 2020 was a boon year for most Americans. The average savings rate went higher than it's been in a long time.[1] That doesn't mean the economy was in good shape. Point being, there isn't a simple metric to measure something as complex as a national (let alone global) economy. [1] https://www.statista.com/statistics/246234/personal-savings-...

The economy may not have been "in good shape" in 2020 (and I would agree that it was not) but we're talking specifically about a recession here. By no measure were we in a recession in 2020.

Not saying this with snark, but are you claiming that "bank account balance" is a good metric for measuring whether a recession exists or not?

I'm not saying the definition shouldn't measure what directly impacts people. However, a recession is a metric of a broad economy; this breaks down when applying at the individual level. As the cliché goes, "A recession is when my neighbor loses his job. A depression is when I lose mine."

Re: U.S. economy just had a 2nd quarter of negative growth. Is it in a recession?

#63

Post by jaywalk »

bumby wrote: post #62
jaywalk wrote: post #59

Earlier quoted context omitted.

The economy may not have been "in good shape" in 2020 (and I would agree that it was not) but we're talking specifically about a recession here. By no measure were we in a recession in 2020.

Not saying this with snark, but are you claiming that "bank account balance" is a good metric for measuring whether a recession exists or not? I'm not saying the definition shouldn't measure what directly impacts people. However, a recession is a metric of a broad economy; this breaks down when applying at the individual level. As the cliché goes, "A recession is when my neighbor loses his job. A depression is when I…

No, I'm not claiming that bank account balance itself is an indicator of anything. But when there are a bunch of other indicators, and I see my bank account balance going down (and I know I'm not alone on that) I'm not particularly interested in hearing why it's actually not a recession.

Re: U.S. economy just had a 2nd quarter of negative growth. Is it in a recession?

#64

Post by hereme888 »

bmitc wrote: post #49
mc32 wrote: post #33

The economy is such a shitshow of a political football that it’s starting to look like a “tulip” republic where you define your way out of tough spots and ever so forcefully avoid mention of the bad thing that would “influence” voters. I think it's a mistake, like it was a mistake to call inflation transitory. It’s easy. Own up and start working toward solutions instead of sweeping things under the rug and worrying a…

It's a typical Republican strategy over the past few decades. Republican presidents tend to tank the economy, which is then handed over to Democrats, who spend their presidency getting things back to an even keel. Then the recovering or recovered economy gets handed over to Republicans who false espouse their success in "fixing" the economy and then proceed to tank it again.

What world do you live in? Reading far left news too much?

Re: U.S. economy just had a 2nd quarter of negative growth. Is it in a recession?

#65

Post by hereme888 »

senectus1 wrote: post #44

oh for crying out loud. yes the answer is yes. This recession has been on its way for a while, and in my opinion this is just the beginning. I think next year and maybe the year after is likely to be very ugly.

Agreed. It's gonna get bad for the next year. There's just no way around it.

Re: U.S. economy just had a 2nd quarter of negative growth. Is it in a recession?

#66

Post by bumby »

jaywalk wrote: post #63
bumby wrote: post #62

Earlier quoted context omitted.

Not saying this with snark, but are you claiming that "bank account balance" is a good metric for measuring whether a recession exists or not? I'm not saying the definition shouldn't measure what directly impacts people. However, a recession is a metric of a broad economy; this breaks down when applying at the individual level. As the cliché goes, "A recession is when my neighbor loses his job. A depression is when I…

No, I'm not claiming that bank account balance itself is an indicator of anything. But when there are a bunch of other indicators, and I see my bank account balance going down (and I know I'm not alone on that) I'm not particularly interested in hearing why it's actually not a recession.

Honestly, that's likely a cognitive bias about weighting of the indicators in your assessment. Naturally, your personal bank account will be over-weighted (just like in the cliche above). And there'll likely be an availability bias regarding the shrinkage of GDP. For one, it's easy for media to glom onto and two, it's a really easy metric for people to understand.

However, what you're probably not doing is factoring in all the other metrics that matter. Unemployment rate, the relative contraction in comparison to previous recessions, GDP in constant dollars, GDP in present dollars, business sales, industrial production, hours of non-farm employment, wage growth, etc. are all factors that the NBER uses to assess whether conditions meet the actual definition of a recession.

Point being, the simplified models we use as laypeople (e.g., GDP growth + bank account) create much more uncertainty. Our level of confidence should be inversely related to that uncertainty. It doesn't mean they're wrong, but that our conclusions should be loosely held.

Re: U.S. economy just had a 2nd quarter of negative growth. Is it in a recession?

#67

Post by bmitc »

hereme888 wrote: post #64
bmitc wrote: post #49

Earlier quoted context omitted.

It's a typical Republican strategy over the past few decades. Republican presidents tend to tank the economy, which is then handed over to Democrats, who spend their presidency getting things back to an even keel. Then the recovering or recovered economy gets handed over to Republicans who false espouse their success in "fixing" the economy and then proceed to tank it again.

What world do you live in? Reading far left news too much?

Is this not accurate? I would legitimately like to know if it’s not the case.

Re: U.S. economy just had a 2nd quarter of negative growth. Is it in a recession?

#70

Post by dragonwriter »

barrad0s wrote: post #11

If the government changes the definition I guess we're not right?

The NBER hasn't changed the definition of a recession for a long time, and it's never been two consecutive down quarters.

It's just that, of the time periods since the mid-19th century for which the NBER has determined recessions, the two consecutive down quarters rule of thumb has had no (previous) false positives since 1947.

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