Reverse Betteridge's law: Yes, this is a recession. You might not think it's a recession, and you might hate the word, but the conditions have been met.
I'm not going to shed any tears on behalf of anyone near the top, they're going to be fine. Despite their high positions, they won't have a fall, unlike those already at the bottom.
those already at the bottom are at the bottom, the middle class will suffer. Thus leading to a widening of the gap in wealth inequality. You will own nothing and be happy.
The middle class is a myth. If you need your income or assets to survive and can't use it to feast on your neighbors during a crisis with the other vultures then you're a peon like the rest of us.
Just because you have to sell the jet ski and the SUV and might have to sell both houses because you over-leveraged trying to leech off of the rest of the working class doesn't mean you're being hurt more than the single mothers with two minimum wage jobs that are now homeless.
There used to be a way, essentially limiting exposure of yourself to just media and maintenance. If you actually owned the necessary assets and were able to get a big buffer.
Typically you got there by not overleveraging or using debt instruments at all.
These days it's getting ever harder to pull it off, if not impossible. Mostly because housing market jumped the shark.
Selling assets can be a problem anyway since many of them actually depreciate hard. Jet ski and old fuel guzzling SUV likely nobody will want. The house, maybe, but it will get ever harder to sell them as buyers are starved of money and credit.
"The conditions have been met" refers to the colloquial definition of a recession as 2 quarters of GDP contraction, which is not a technical measure, not respected or entertained by economists, not used by policy-makers, etc.
It's like saying my camera is better than yours because mine is 40 megapixels. The experts know that this comparison is wrong, but for the lay person, it's easy and quick to use it.
Regardless, the cooling off is engineered and necessary. The central bank created this "recession" (not yet? but probably soon regardless?) by raising interest rates extremely quickly because inflation is out of control, because globalized shipping has collapsed sufficiently that demand can't be met here or in most major economies.
With unemployment at 3.5% and dropping and hiring still going strong, wages rising faster than at any point in most of our lives, I'm personally not worried about what will hopefully be light and necessary recession, even if the "2 quarters of negative GDP growth" is a bunk line, cooling off the economy until the global supply chains can resolve is obviously the only solution to inflation.
> With unemployment at 3.5% and dropping and hiring still going strong, wages rising faster than at any point in most of our lives, I'm personally not worried about what will hopefully be light and necessary recession, even if the "2 quarters of negative GDP growth" is a bunk line, cooling off the economy until the global supply chains can resolve is obviously the only solution to inflation.
The best way to fool yourself into thinking that the country is moving in the right direction is to look at money metrics such as wages, GDP, savings etc. They deteriorate in a matter of weeks when shit hits the fan, so they are only backwards looking.
The sad reality is that we are not using any new or novel products/services compared to 5 years ago. If you exclude the mRNA vaccines the pipeline of innovation is also empty.
Where will the next bump in quality of life come from? We are still milking the internet by making copies of apps and websites .
> The sad reality is that we are not using any new or novel products/services compared to 5 years ago. If you exclude the mRNA vaccines the pipeline of innovation is also empty.
I'm sorry, but do you expect us to take this comment seriously? This is frankly absurd.
Genuinely except for that and the steady progress of new deep learning results nobody can verify because only the gods' own technological children possess enough mana to try it, I struggle to think of progress in the past five years. I certainly have seen a lot happen, mostly everything sliding into a sewer overflowing already with shit.
> Deep Learning is measurably out-performing previous algorithms, and making falsifiable predictions.
If you'd care to quote the entire thing where I was telling you you cannot verify it unless you have enough "mana" (i.e. money) to try it, you would also see you have answered your own rebuttal with my original post.
> if you read HN and can't think of progress in the last five years, then you must be incredibly cynical.
Perhaps! But I don't see you refuting me in any way, so perhaps I'm just correct :)
> unless you have enough "mana" (i.e. money) to try it,
I use deep learning all the time, every day, and the results are better than previous algorithms. I don't need to "verify" the results to know they're better.
> Perhaps! But I don't see you refuting me in any way, so perhaps I'm just correct :)
You're standing in the middle of a record store and complaining that there's no good new music, and then you think the problem is that I'm not enumerating examples to refute you?
If you can't find things to be impressed by on HN, then again, I think you're incredibly cynical.
> And if you read HN and can't think of progress in the last five years, then you must be incredibly cynical.
Reading on HN means 99% of the times aspirational stuff. Aspirational stuff doesn't count.
What counts is stuff that improves quality of life in the real world, not just aspirationally sometimes in the future in order to play the musical chair game of the stock market or VC markets.
Stuff like mRNA vaccines.
An other example would be fracking but that largely happened 2005-2015
We need more. We need cheap and clean energy and research in that sector has happened and is happening now, likewise water purification on large scale or we'll go dry.
Improvements in farming and husbandry are also not being deployed as they're marginally more expensive, even though we critically need them.
The visibly good technologies exist and need to be deployed; due to lack of investment in them, cost is prohibitive.
Crazy reply to read here on hackernews where we're discussing innovations every single day. We are in the middle of a software development golden age and the amount of innovation happening is absolutely absurd.
Just because you haven't found some new gizmo to make your life easier in the past 5 years doesn't mean our entire society has stagnated.
Just because you think making webapps is milking the internet doesn't mean that software is trivial or can't be a force for good, a force for change, a force for innovation, or a force for making peoples lives better. Like why are you even here?
When I think about 5 years ago, I think basically 0 electric cars being sold. I think basically 0 electric charging network. I think basically 0 grid scale solar panel build out. 0 compared to today, at least. We are in the midst of the electric car revolution, the petrochemical refilling grid is being deprecated IN REAL TIME all around us, cars are having AI models updated OTA to achieve lv3 or 4 driver assistance or even to drive themselves.
> Crazy reply to read here on hackernews where we're discussing innovations every single day.
I don't want to discuss, I want to use. Aspirational stuff doesn't improve the quality of life of anybody. It's the equivalent of small talk
> I think basically 0 electric cars being sold. I think basically 0 electric charging network. I think basically 0 grid scale solar panel build out. 0 compared to today, at least. We are in the midst of the electric car revolution, the petrochemical refilling grid is being deprecated IN REAL TIME all around us, cars are having AI models updated OTA to achieve lv3 or 4 driver assistance or even to drive themselves.
That stuff is not for us, it's for people who'd be alive 150 years from now. All the energy transition stuff won't improve our lives one bit, it just prolongs the churn rate of the planet. It's like when AiBnB raises the cleaning fee 1000% and unluckily you are the first client ever to have to pay it. It doesn't add anything to your experience and your staying at the venue. It's a cost, hence it's a minus, not a plus.
mRNA is an example of stuff that it's for us. Matter of fact I have it in me right now and I suppose so do you
> Like why are you even here?
I mean...somebody is being aggressive for no reason. I think making tons of money with software and copying app or by playing the poker game of founding>raising>exiting is nice and all. But at the end of the day making money is just step #1, you still need to have something worthy to buy with that money once you leave the poker table.
That's why Vegas has tons of venues, resturants and nightclubs and stripclubs in the proximity of poker tables. Without all the amenities Vegas would not be different than Oklahoma's Poker scene
Well, yes, officer, I understand that you clocked me going 20 miles per hour over the speed limit, and that has historically matched the colloquial definition of "speeding," but if you consider other factors…
Come on. This is flagrantly the same level of truth-adjustment that the Trump administration was accused of doing.
We were already in one as I said months ago before and the warning signs were there. [0] [1]
Also, you can ignore the badly aged reply in [1] as they are completely incorrect about 'We are most certainly not in a recession.' with the release of these figures. Since everyone knows that you should not wait for the danger to come until someone else tells you that it is now too late. Just like waiting for the figures to tell us right now.
As soon as that happens, you are already too late to prepare for it. November was the time to prepare for the worst. Now it is too late to prepare for that as it is already getting worse now.
why is it such a big deal that it makes people shudder? Europe is about to go off a cliff soon. Are they avoiding words in order not to trigger the robot traders?
Because it’s such blatant gaslighting. It’s been well established that two quarters of negative growth signal a recession. Everyone sees the two quarters of negative growth but our economists are going “well actually we’re not in a recession, we’re experts, believe us”.
And this isn’t the debate over Covid where you could make an argument one way or another. This id plain as day in the numbers and our leaders actually expect us to buy the “well actually we’re not in a recession” bullshit.
There was no aspect of Covid where you could genuinely "make an argument one way or the other", or at least no aspect that was worth talking about. Any sort of "but this other point of view tho" dialectic was bad-faith nutcase reasoning, usually leading directly and measurably to more people dying.
> Two annual quarters of negative growth has been the informal (maybe even formal?) definition for a while now
No, it hasn't.
The informal rule of thumb is two consecutive (not annual) quarters.
But there have been recessions that didn't meet that (most recently, the most recent, two-month COVID recession), and non-recessions (most recently in 1947) that did. The actually definition from NBER is:
“The NBER's traditional definition of a recession is that it is a significant decline in economic activity that is spread across the economy and that lasts more than a few months. The committee's view is that while each of the three criteria—depth, diffusion, and duration—needs to be met individually to some degree, extreme conditions revealed by one criterion may partially offset weaker indications from another.”
Many seem to believe this is the solution for inflation. Which was "transitory" before it was "illusion," as I recall, and a little before that was impossible due to the new understanding granted by MMT.
I mean, the problem wouldn't be any different if growth was 0.1 instead of -0.1, so it wouldn't be a definitional recession. So the problem would still have existed whether the term "recession" applies or not. The emphasis on whether or not we are in a "recession" was always completely misplaced.
The reality is that whether we saw negative growth or not, GDP is clearly contracting.
Which is not a surprise. And not only is it not a surprise, it's the intended effect of the inflation fighting efforts being undertaken by the Fed.
The Fed, or the government, has very little to no control over global supply chain issues, Russia going on a dumb war, and China shutting down massive parts of the country on the whiff of COVID, so the Fed is using the only tool it has available to it.
Which is completely slowing down the economy. Why are we surprised that the economy is slowing down when that's what we're trying to do.
Yes, the problems with the economy remain the same whether we attach the label "recession" or not. Yes, job growth is a counter-indicator, an unusual feature of an economy having the problems we are having.
However, there are separate problems with the government scrambling to focus on messaging/spin instead of the actual issues, and the magnifying problem of the whole media complex jumping to toe the party line.
Current statements differ dramatically from previous comments, such as two years ago, when global events also caused a downturn, or even months ago, before the white house started messaging "other factors".
For what it's worth, 2 years ago, NPR stated, 'The standard definition of a recession is "a decline in economic activity that lasts more than a few months.' while noting the covid effects on the economy were broad and deep enough to declare a recession earlier than usual. https://www.npr.org/sections/coronavirus-live-updates/2020/0...
Yes, let's get the economy going, but let's also have the press play their watchdog role, and not just be boosters of the administration.
Job growth on it's own is nothing if the new jobs cannot provide a living (well enough of one), as it will still starve multiple sectors of economy of income and shrink them hard, possibly beyond recovery.
And interest rates are already near zero so that cannot be cut either. Taxes could but it will instead ruin already underinvested infrastructure.
Personal monetary liquidity would be a good measure, combined with business liquidity. (Money velocity excluding banks.)
Unfortunate fact is that because prices increased (mostly due to greed in oil/gas sector and housing bubble) and wages did not, it results in USA people facing austerity and cutting spending. And if they have to do it, so do companies, ultimately.
Covid mostly accelerated the trend in a few industries.
That same definition applied to when the Trump administration caused a brief recession in 2020 due to the lockdowns, with the media screaming at him for that.
When I see the current administration which especially the media said that 'they should be doing much better' than the last one, trying to escape by changing definitions, and dodging the hard questions, everyone can tell that it is going to get worse and they knew it would, and the numbers don't lie.
Thus, given that almost all politicians are liars and have spin-doctors distorting reality, should we listen to everything they say? No. A dose of skepticism on what they are 'telling' us will unveil the bullshit that they are saying vs what is happening in reality.
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.
The hoops that they have to jump through to try and prove that it's not a recession basically prove that it is. "But this team of eight economists hasn't voted to say it's a recession!" Great, can they tell that to my bank account? It seems to show the opposite.
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.
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."
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.
https://text.npr.org/1113649843 <- direct link to nice, simple, fast loading, text only version, without gobs of stalking third parties.
Would be nice for other outlets to provide such a facility. (even better: for modern stalkiness and over-scripting & over-graphical-jigery-pokery-ing to be rarer generally).
Any website that produces articles sauced with that kind of stalker vibe is not one worth reading. If everyone kept that in mind, they'd die soon enough.
Whether or not we are "in a recession" will not change the underlying metrics. Whatever positives may exist, the agreement seems to be that on an individual-by-individual basis, things are not as good now economically than they were a year ago. Whether NPR or NY Times or WaPo (or the White House) calls it a recession or not is not what's going to drive people's behavior - their bank accounts, their mortgage and rent payments, and the price of food will.
Importantly, investment, securing loans and consequently hiring is going down. It may turn out to be a mild recession or what was called "a technical recession" 2 consecutive down quarters but very mild slowdowns.
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 about non-essential politics. People are not that stupid.
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.
NBER specifically says GDP is too infrequent and heavily revised to use. Here is what actually happens:
"The NBER's definition emphasizes that a recession involves a significant decline in economic activity that is spread across the economy and lasts more than a few months. In our interpretation of this definition, we treat the three criteria—depth, diffusion, and duration—as somewhat interchangeable. That is, while each criterion needs to be met individually to some degree, extreme conditions revealed by one criterion may partially offset weaker indications from another. For example, in the case of the February 2020 peak in economic activity, the committee concluded that the subsequent drop in activity had been so great and so widely diffused throughout the economy that, even if it proved to be quite brief, the downturn should be classified as a recession.
Because a recession must influence the economy broadly and not be confined to one sector, the committee emphasizes economy-wide measures of economic activity. The determination of the months of peaks and troughs is based on a range of monthly measures of aggregate real economic activity published by the federal statistical agencies. These include real personal income less transfers, nonfarm payroll employment, employment as measured by the household survey, real personal consumption expenditures, wholesale-retail sales adjusted for price changes, and industrial production. There is no fixed rule about what measures contribute information to the process or how they are weighted in our decisions. In recent decades, the two measures we have put the most weight on are real personal income less transfers and nonfarm payroll employment.”
> And NBER has never failed to put the recession stamp on back-to-back drops in GDP.
Yes, it has, though only for a period where it was doing business cycle dating purely long-retrospectively and with no contemporary political/policy weight (1947).
OTOH, that just reinforces the idea that the idea that two down quarters doesn't always mean recession isn't a novelty or invented for contemporary political/policy impact.
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.
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[ 4.1 ms ] story [ 139 ms ] threadI'm not going to shed any tears on behalf of anyone near the top, they're going to be fine. Despite their high positions, they won't have a fall, unlike those already at the bottom.
Just because you have to sell the jet ski and the SUV and might have to sell both houses because you over-leveraged trying to leech off of the rest of the working class doesn't mean you're being hurt more than the single mothers with two minimum wage jobs that are now homeless.
These days it's getting ever harder to pull it off, if not impossible. Mostly because housing market jumped the shark.
Selling assets can be a problem anyway since many of them actually depreciate hard. Jet ski and old fuel guzzling SUV likely nobody will want. The house, maybe, but it will get ever harder to sell them as buyers are starved of money and credit.
It's like saying my camera is better than yours because mine is 40 megapixels. The experts know that this comparison is wrong, but for the lay person, it's easy and quick to use it.
Regardless, the cooling off is engineered and necessary. The central bank created this "recession" (not yet? but probably soon regardless?) by raising interest rates extremely quickly because inflation is out of control, because globalized shipping has collapsed sufficiently that demand can't be met here or in most major economies.
With unemployment at 3.5% and dropping and hiring still going strong, wages rising faster than at any point in most of our lives, I'm personally not worried about what will hopefully be light and necessary recession, even if the "2 quarters of negative GDP growth" is a bunk line, cooling off the economy until the global supply chains can resolve is obviously the only solution to inflation.
The best way to fool yourself into thinking that the country is moving in the right direction is to look at money metrics such as wages, GDP, savings etc. They deteriorate in a matter of weeks when shit hits the fan, so they are only backwards looking.
The sad reality is that we are not using any new or novel products/services compared to 5 years ago. If you exclude the mRNA vaccines the pipeline of innovation is also empty.
Where will the next bump in quality of life come from? We are still milking the internet by making copies of apps and websites .
I'm sorry, but do you expect us to take this comment seriously? This is frankly absurd.
What? Deep Learning is measurably out-performing previous algorithms, and making falsifiable predictions.
And if you read HN and can't think of progress in the last five years, then you must be incredibly cynical.
If you'd care to quote the entire thing where I was telling you you cannot verify it unless you have enough "mana" (i.e. money) to try it, you would also see you have answered your own rebuttal with my original post.
> if you read HN and can't think of progress in the last five years, then you must be incredibly cynical.
Perhaps! But I don't see you refuting me in any way, so perhaps I'm just correct :)
I use deep learning all the time, every day, and the results are better than previous algorithms. I don't need to "verify" the results to know they're better.
> Perhaps! But I don't see you refuting me in any way, so perhaps I'm just correct :)
You're standing in the middle of a record store and complaining that there's no good new music, and then you think the problem is that I'm not enumerating examples to refute you?
If you can't find things to be impressed by on HN, then again, I think you're incredibly cynical.
Reading on HN means 99% of the times aspirational stuff. Aspirational stuff doesn't count.
What counts is stuff that improves quality of life in the real world, not just aspirationally sometimes in the future in order to play the musical chair game of the stock market or VC markets.
Stuff like mRNA vaccines.
An other example would be fracking but that largely happened 2005-2015
So which is it? Is HN filled with content showcasing the pipeline of innovation or not?
Improvements in farming and husbandry are also not being deployed as they're marginally more expensive, even though we critically need them.
The visibly good technologies exist and need to be deployed; due to lack of investment in them, cost is prohibitive.
Just because you haven't found some new gizmo to make your life easier in the past 5 years doesn't mean our entire society has stagnated.
Just because you think making webapps is milking the internet doesn't mean that software is trivial or can't be a force for good, a force for change, a force for innovation, or a force for making peoples lives better. Like why are you even here?
When I think about 5 years ago, I think basically 0 electric cars being sold. I think basically 0 electric charging network. I think basically 0 grid scale solar panel build out. 0 compared to today, at least. We are in the midst of the electric car revolution, the petrochemical refilling grid is being deprecated IN REAL TIME all around us, cars are having AI models updated OTA to achieve lv3 or 4 driver assistance or even to drive themselves.
Where's the innovation?? Open your eyes!!
I don't want to discuss, I want to use. Aspirational stuff doesn't improve the quality of life of anybody. It's the equivalent of small talk
> I think basically 0 electric cars being sold. I think basically 0 electric charging network. I think basically 0 grid scale solar panel build out. 0 compared to today, at least. We are in the midst of the electric car revolution, the petrochemical refilling grid is being deprecated IN REAL TIME all around us, cars are having AI models updated OTA to achieve lv3 or 4 driver assistance or even to drive themselves.
That stuff is not for us, it's for people who'd be alive 150 years from now. All the energy transition stuff won't improve our lives one bit, it just prolongs the churn rate of the planet. It's like when AiBnB raises the cleaning fee 1000% and unluckily you are the first client ever to have to pay it. It doesn't add anything to your experience and your staying at the venue. It's a cost, hence it's a minus, not a plus.
mRNA is an example of stuff that it's for us. Matter of fact I have it in me right now and I suppose so do you
> Like why are you even here?
I mean...somebody is being aggressive for no reason. I think making tons of money with software and copying app or by playing the poker game of founding>raising>exiting is nice and all. But at the end of the day making money is just step #1, you still need to have something worthy to buy with that money once you leave the poker table.
That's why Vegas has tons of venues, resturants and nightclubs and stripclubs in the proximity of poker tables. Without all the amenities Vegas would not be different than Oklahoma's Poker scene
Come on. This is flagrantly the same level of truth-adjustment that the Trump administration was accused of doing.
https://en.wikipedia.org/wiki/Disinformation_Governance_Boar...
Also, you can ignore the badly aged reply in [1] as they are completely incorrect about 'We are most certainly not in a recession.' with the release of these figures. Since everyone knows that you should not wait for the danger to come until someone else tells you that it is now too late. Just like waiting for the figures to tell us right now.
As soon as that happens, you are already too late to prepare for it. November was the time to prepare for the worst. Now it is too late to prepare for that as it is already getting worse now.
[0] https://news.ycombinator.com/item?id=29508238
[1] https://news.ycombinator.com/item?id=31441710
And this isn’t the debate over Covid where you could make an argument one way or another. This id plain as day in the numbers and our leaders actually expect us to buy the “well actually we’re not in a recession” bullshit.
Just because one party wants to change the definition to avoid hubbub to avoid losing political power does not change reality.
No, it hasn't.
The informal rule of thumb is two consecutive (not annual) quarters.
But there have been recessions that didn't meet that (most recently, the most recent, two-month COVID recession), and non-recessions (most recently in 1947) that did. The actually definition from NBER is:
“The NBER's traditional definition of a recession is that it is a significant decline in economic activity that is spread across the economy and that lasts more than a few months. The committee's view is that while each of the three criteria—depth, diffusion, and duration—needs to be met individually to some degree, extreme conditions revealed by one criterion may partially offset weaker indications from another.”
https://www.nber.org/business-cycle-dating-procedure-frequen...
The reality is that whether we saw negative growth or not, GDP is clearly contracting.
Which is not a surprise. And not only is it not a surprise, it's the intended effect of the inflation fighting efforts being undertaken by the Fed.
The Fed, or the government, has very little to no control over global supply chain issues, Russia going on a dumb war, and China shutting down massive parts of the country on the whiff of COVID, so the Fed is using the only tool it has available to it.
Which is completely slowing down the economy. Why are we surprised that the economy is slowing down when that's what we're trying to do.
However, there are separate problems with the government scrambling to focus on messaging/spin instead of the actual issues, and the magnifying problem of the whole media complex jumping to toe the party line.
Current statements differ dramatically from previous comments, such as two years ago, when global events also caused a downturn, or even months ago, before the white house started messaging "other factors".
For what it's worth, 2 years ago, NPR stated, 'The standard definition of a recession is "a decline in economic activity that lasts more than a few months.' while noting the covid effects on the economy were broad and deep enough to declare a recession earlier than usual. https://www.npr.org/sections/coronavirus-live-updates/2020/0...
Yes, let's get the economy going, but let's also have the press play their watchdog role, and not just be boosters of the administration.
Personal monetary liquidity would be a good measure, combined with business liquidity. (Money velocity excluding banks.)
Unfortunate fact is that because prices increased (mostly due to greed in oil/gas sector and housing bubble) and wages did not, it results in USA people facing austerity and cutting spending. And if they have to do it, so do companies, ultimately.
Covid mostly accelerated the trend in a few industries.
When I see the current administration which especially the media said that 'they should be doing much better' than the last one, trying to escape by changing definitions, and dodging the hard questions, everyone can tell that it is going to get worse and they knew it would, and the numbers don't lie.
Thus, given that almost all politicians are liars and have spin-doctors distorting reality, should we listen to everything they say? No. A dose of skepticism on what they are 'telling' us will unveil the bullshit that they are saying vs what is happening in reality.
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.
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-...
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."
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.
Would be nice for other outlets to provide such a facility. (even better: for modern stalkiness and over-scripting & over-graphical-jigery-pokery-ing to be rarer generally).
It’s easy. Own up and start working toward solutions instead of sweeping things under the rug and worrying about non-essential politics. People are not that stupid.
Another point of evidence suggesting that the answer to every news article with a question mark in the title is "duh"
https://www.nber.org/research/business-cycle-dating
NBER specifically says GDP is too infrequent and heavily revised to use. Here is what actually happens:
"The NBER's definition emphasizes that a recession involves a significant decline in economic activity that is spread across the economy and lasts more than a few months. In our interpretation of this definition, we treat the three criteria—depth, diffusion, and duration—as somewhat interchangeable. That is, while each criterion needs to be met individually to some degree, extreme conditions revealed by one criterion may partially offset weaker indications from another. For example, in the case of the February 2020 peak in economic activity, the committee concluded that the subsequent drop in activity had been so great and so widely diffused throughout the economy that, even if it proved to be quite brief, the downturn should be classified as a recession.
Because a recession must influence the economy broadly and not be confined to one sector, the committee emphasizes economy-wide measures of economic activity. The determination of the months of peaks and troughs is based on a range of monthly measures of aggregate real economic activity published by the federal statistical agencies. These include real personal income less transfers, nonfarm payroll employment, employment as measured by the household survey, real personal consumption expenditures, wholesale-retail sales adjusted for price changes, and industrial production. There is no fixed rule about what measures contribute information to the process or how they are weighted in our decisions. In recent decades, the two measures we have put the most weight on are real personal income less transfers and nonfarm payroll employment.”
https://www.nber.org/research/business-cycle-dating
Yes, it has, though only for a period where it was doing business cycle dating purely long-retrospectively and with no contemporary political/policy weight (1947).
OTOH, that just reinforces the idea that the idea that two down quarters doesn't always mean recession isn't a novelty or invented for contemporary political/policy impact.
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.