The White House is pointing out that the US isn't really in a recession

[867-5309.]

...Should the Thursday report show output shrinking again, debate around the economy's health will quickly intensify. The rule-of-thumb definition of a downturn has long been back-to-back quarters of negative GDP. The coming data release could very well show just that, but the White House is already explaining why defining a recession requires much more nuance.

For one, the National Bureau of Economic Research has much more stringent criteria for deciding when a recession starts, members of the White House Council of Economic Advisors wrote in a Thursday blog post. The organization — which serves as the semi-official authority for deciding when business cycles start and end — defines a recession as "a significant decline in economic activity that is spread across the economy and lasts more than a few months." It also considers factors such as employment, consumer spending, and industrial production.

That looser definition makes it less likely the US is actually in an economic slump, the team said. The variables the NBER tracks have shown "strong growth" since the start of the pandemic and continued to improve through the first half of 2022. The unemployment rate remains a historically low 3.6%, and monthly job creation in the second quarter handily surpassed the pre-pandemic trend...

https://www.businessinsider.com/white-house-biden-recession-gdp-economic-report-2022-7


Expect some gloom and doom recession talk in the media. They will fail to see the big picture.

[elleng]

1. 'Much more nuance' required, but NUANCE doesn't get far in today's media.

[PSPS]

2. The traditional idea of a "recession" isn't applicable here. This is a unique situation.

For one thing, we're still in a pandemic (despite the media's advertising-driven charade of it being otherwise) and its effect on the workforce, supply chain, etc. Another thing is the Russian invasion and war causing widespread food and energy shortages. This is a combination without any history as a guide.

A third thing is the low unemployment rate. One key indicator of a recession is high unemployment. Recessions never have low unemployment.

My admittedly amateur opinion is that this is all a symptom of pandemic-driven speeding up the movement to a new kind of economy. It would have happened over then next twenty years anyway but was compressed into a year or two because of the pandemic. Office space vacancy is still high with no signs of improving (Amazon has started cancelling office projects in the works) and people have come to prefer, even insist on, working at home (the employers wanting to return to normal are relenting due to enormous pushback from their employees as well as potential new hires.)

[doc03]

3. Recession with 3.6% unemployment and every business has a help wanted sign?

[uponit7771]

6. THIS !!!! ☝🏾☝🏾☝🏾

[Takket]

4. Recession? Are there massive layoffs?

Everyone is working, theaters are packed, vacation spots are packed, stadiums are packed......... people aren't just working they are spending billions on entertainment and things they normally would not in a recession.

[Walleye]

7. Yep. Everywhere I look I see people spending money hand over fist.Sure doesn't seem like a recession

[MichMan]

10. Why would the GDP numbers show negative growth then?

If everyone is working and spending all this money as you say, the GDP growth wouldn't be negative.

[Walleye]

11. I don't know about that. But I've lived through recessions before and this doesn't feel like one

[FBaggins]

14. GDP figures are inflation-adjusted

A substantial increase in spending can easily be gobbled up by 9% inflation

[robodruid1]

5. Interesting Tea Leaf Reading

So i guess this is confirmation that next quarters GDP is going to be negative.

The key is going to be next quarter. Can we rebound from 6 months of (minor) contraction while raising interest rates from the fed, food scarcity due to Russian invasion of Ukraine, while having low employment presumably with increasing labor rates? And a potential new pandemic?

Glad we have Biden.

[former9thward]

8. Two straight quarters of economic contraction is the definition of a recession.

That has been the case with all previous administrations. That will not change now. Big tech is laying off and they are increasingly an important sector of the economy.

[DetroitLegalBeagle]

9. The Big 3 and some auto suppliers are planning layoffs as well

First wave is coming soon, 2nd wave in the fall. Heard some other businesses are freezing hiring now too.

[doc03]

13. It seems car sales are off because of lack

of supply rather than demand. Just last week I stopped at the Honda dealer, they only had 3 CRVs on the lot. The salesman said they were sold and all the ones in transit are already sold. A friend of mine bought a new Chevy pickup, some of the options don't work because they don't have the new chips. I have heard people are paying thousands over sticker for some models. People are paying over asking price for homes. Technicly it is a recession but certainly different than any I have ever seen, I am 74.

[doc03]

12. Apparently the loses there are matched by gains

elsewhere since unemployment has been stuck at 3.6% for several months.