Recession

Are we in a recession? Or recovery? There is no text book definition of a recession that I know of but I think its widely held that 2 declining quarters of gdp's is a recession and a 10% decline is a depression. if this is so why is no one saying we are back into a recession?



You can see 2 quarters of declining numbers....hate to be a negative Nancy but the writing is on the wall. Any thoughts?

Chart source: http://www.bea.gov/briefrm/gdp.htm

A better question is have we entered "another" recession and will this one take out the lows (gdp not S&P) of the last one? Which would put us dangerously close to another depression.

Really blessed to make money trading....the lines at the food bank just down the road is staggering and very sad to see day after day. Actually had an individual wonder into our neighborhood begging for the pears off my tree last week and another living in his car wanting to cut my grass for just 20 bucks....The voters wanted "change" and they got it.

Hi Joe,

I think the technical definition of a recession is 2 quarters of negative growth, not based on declining from previous quarters.. There are plenty of thoughts about the reality of being in a depression though.. should be an interesting few years of deleveraging and governments attempting to inflate out of the problem with the corporate world intent on cutting costs and keeping pay as low as possible... trade well and look for volatility I guess....

Originally posted by CharterJoe

A better question is have we entered "another" recession

We have never come out of the previous one. That's why we hear so much talk about the "double-tip recession". Just look at how the gold prices soar - it is mainly caused by the weakening USD, is it not?

Originally posted by chrisp

Hi Joe,

I think the technical definition of a recession is 2 quarters of negative growth, not based on declining from previous quarters.. There are plenty of thoughts about the reality of being in a depression though.. should be an interesting few years of deleveraging and governments attempting to inflate out of the problem with the corporate world intent on cutting costs and keeping pay as low as possible... trade well and look for volatility I guess....

If thats true about 2 1/4's being a recession than you would have to go back to 94 to the last recession....I think its widely held we were in a brief one in 2001 after the horrific sell off in the NASDAQ. And another in 98 with the Russian thing

wikipedia definition fwiw... lots more info there...
Definition

In a 1975 New York Times article, economic statistician Julius Shiskin suggested several rules of thumb for defining a recession, one of which was "two down quarters of GDP".[3] In time, the other rules of thumb were forgotten,[4] and a recession is now often defined simply as a period when GDP falls (negative real economic growth) for at least two quarters.[5][6] Some economists prefer a definition of a 1.5% rise in unemployment within 12 months.[7]

In the United States, the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) is generally seen as the authority for dating US recessions. The NBER defines an economic recession as: "a significant decline in [the] economic activity spread across the country, lasting more than a few months, normally visible in real GDP growth, real personal income, employment (non-farm payrolls), industrial production, and wholesale-retail sales." Almost universally, academics, economists, policy makers, and businesses defer to the determination by the NBER for the precise dating of a recession's onset and end.

Yes I know what the guru's say. All I am saying if that's the definition then why do they have 2000 down in the books as a recession where we only had one quarter in negative GDP growth? Which is why I think a better definition of a recession is three fold...a declining GDP, tight credit (mostly commercial paper) and high and advancing unemployment....we have all of those.

What I don't get is why is it if it takes 2 quarters of negative GDP to determine a recession (that's 6 months by my math) did it take them a year to tell us we were in a recession and then over a year to tell us we were out?