Care to place a bet on first-quarter GDP, scheduled for release tomorrow?
In macroeconomics, a recession is a decline in a country’s real gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year.
In the US, the judgment of the business-cycle dating committee of the National Bureau of Economic Research regarding the exact dating of recessions is generally accepted. The NBER has a more general framework for judging recessions:
A recession is 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. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough.
I realize “terms and definitions” can sometimes be used to obfuscate real issues, but I think there is some merit to sticking with NBER’s definition of a “recession”. What we’re all wondering about is, will our economy be getting better or worse over the coming months, and how are we doing, so far?
My guess? Yeah, we had positive growth in the first quarter. Which means we’re not in a “recession”. So, take that, Feldstein!
This will do nothing to sooth the fears of rational people. They’ll jump on the number and say, “Well, that’s just one definition.” Or, “Well, maybe not technically, but we’re hurting!” Or, “Well, not in first quarter, but we will be in quarter #2!”
All I’m saying is, our economy seems to be in flux. Therefore, let’s not lose our cool. And, let’s not jump at every promise of “bailouts” and “fiscal stimuli”.
Regardless of what you read in the daily paper, tell me, are you really hurting right now? I mean, at all?