Seems like a lot of people on Twitter think this is some sort of critical decision. I don't see how the NBER's classification should make any difference to 99% of people.
Would all the people bending over backwards and trying to avoid using the term "recession" for the last two negative quarters of GDP growth be doing this if Trump was still president?
No, definately not. This is exactly what is wrong with Journalists, academics and economists. Their political bias pollutes their opinions and articles depending who is in charge.
Minor correction: "There are basically three notions of “recession” — I call them the official definition, the official definition, and the academic definition." I assume the second one is supposed the be the fok definition?
There has been quite a laugh in the uk at bidenomics trying to change from what you call the folk definition of a technical recession. 38 attempts at amendments of the definition in wiki occurred over the last 3 days. Pure trolling going on. Also the media were trailing it and some notable economists in advance. All to take the heat of biden.
Soon like Argentina in the past they'll fake inflation. I dont know if they would have the nerve to omit printing them. As you say it is politics but basically the left in the usa have become fundamentally dishonest. If it had been a republican they would have used the folk definition. But nber is just kicking the can down the road.
This is nothing other than a campaign ad for the Democrats and is intellectually dishonest. This is the first time in my 7 decades on the planet that a broad base of people - and ALL OF THEM from the left - decided that the definition of a recession is something different than two quarters for negative growth. Never happened before. Certainly not in 1992 (and I might add, that recession then was over by Election Day but announced by the deep state afterwards). Remember - “it’s the economy stupid”?
No one with one eye open can’t see that this economy is in terrible shape. That’s why the left is going through wind mill action to get rid of the R word and, like the border lie a blue streak. Oh yes, the border is secure. Secure enough for 3 million illegals to sneak in this year. Oh, no, there’s no recession and things are peachy. They still count as their achievement the “growth” in jobs and economic activity that was nothing other than the return to the status quo before they shut down the economy in 2020 when everyone lost their jobs and businesses were shut down. They know they’re lying. It’s astounding. But then again, who are you gonna believe - them,more your own lying eyes,.
These people never say “a recession now would be fine” before one happens. Instead, corrupt media voices line up to defend yet another blow inflicted by the Democrats by telling us “it’s fine.” It’s not fine - not by a long shot. We shouldn’t let ourselves be fooled by media sycophants.
You end by describing this as a mild recession, but inflation is running hot. If historic measures are any indication it will take a lot more interest rate hikes to get under control, meaning we are at the start of something much more painful. On top of this, the high government debt makes for uncharted territory - a brief spike in interest rates to combat inflation may be survivable, but sustained higher interest rates will be intolerable for the federal deficit. What happens then? Letting inflation burn out of control is unthinkable; radical cuts in government payouts on the one hand or radical tax increases on the other will have either the producers or parasites up in arms (literally), and will inflict their own economic devastation either way.
I don't think inflation is the real danger any longer. Supply chain gaps are being rapidly filled, and inventories are growing. Additionally, commodities are now falling dramatically. And all thus has happened in response to a mere 75 basis point hike (before yesterday's action). That points to tremendous underlying financial fragility (probably caused by too much private debt, a problem left unresomved after 2008, when we shoukd have dealt with it).
Also worth noting the change in the Fed stance. Fed met last on June 15. Powell justified the largest Fed rate hike since 1994 on the following grounds:
The economy was strong.
Payrolls were booming.
The consumer was strong.
Weaker retail goods sales were offset by stronger services purchases.
Long-term inflation expectations were rising.
Before June 15, most of the U.S. economic data did not support Powell’s claims.
Since then, we have had an across-the-board deterioration in almost all economic indicators:
Yes, payrolls have remained ridiculously strong. But we now have a 3-month average household survey job change that is significantly negative. Whenever that has happened in the past we were already in recession. All the survey data and initial claims show considerable employment deterioration.
On June 30 the report on overall real PCE showed the same downward revisions as had retail sales, and it also showed an outright decline in real PCE in May, as has had the report on retail sales.
On inflation expectations Powell was referring to a rise in the 5-year inflation expectations in the Michigan sentiment survey to 3.3% which he said was “eye-catching”. That number was revised down to 3.1%, and the preliminary July reading is down further to 2.8% where it was before the inflation indices took off.
Since Powell spoke that June 15, most commodity prices have fallen, and many have crashed.
Since Powell spoke many economic indicators have plunged: the most recent bring new home sales with revisions, existing home sales, housing starts, the S&P Global PMIs, real construction spending, and industrial production with revisions.
The commentariat are aware of this broad sweep of bad economic news. So are market participants. Look at bonds. Bond prices crashed on the Fed’s hawkish move in mid-June. Since then, they have been rallying. They have now traced out an impressive reverse head and shoulders pattern on the verge of a breakout. The denizens of the bond market, like almost everyone else, see that the economy is not strong, but that a recession is imminent and may be underway and intensifying
With inflation at very high levels, unemployment at very low levels, and the party in power in DC antagonistic to big business, it is hard to see where "growth" will come from, at least in the short term. More government spending in an economy that has no slack labor is reckless. Imploring big business to invest capital in labor saving (and productivity enhancing) technology is feckless.
Noah, in a comment below, you state that the Fed needs to tamp down on demand even though our supply issues are quickly righting themselves. I've read this analysis elsewhere, that our inflation problem is demand-driven.
This is the very essence of what people think of as a poor economy. Demand shrinks because people decide they can't afford things that they could a year ago.
People feel the gut punch of a decrease in their standards of living. They are in a very real sense, poorer.
It's amazing to hear Democrats making the claim that this is a good economic outcome.
Seems like a lot of people on Twitter think this is some sort of critical decision. I don't see how the NBER's classification should make any difference to 99% of people.
Would all the people bending over backwards and trying to avoid using the term "recession" for the last two negative quarters of GDP growth be doing this if Trump was still president?
No, definately not. This is exactly what is wrong with Journalists, academics and economists. Their political bias pollutes their opinions and articles depending who is in charge.
Minor correction: "There are basically three notions of “recession” — I call them the official definition, the official definition, and the academic definition." I assume the second one is supposed the be the fok definition?
If you swapped "DNC" for "GOP", given the same economic circumstances, this column would literally be inverted.
There has been quite a laugh in the uk at bidenomics trying to change from what you call the folk definition of a technical recession. 38 attempts at amendments of the definition in wiki occurred over the last 3 days. Pure trolling going on. Also the media were trailing it and some notable economists in advance. All to take the heat of biden.
Soon like Argentina in the past they'll fake inflation. I dont know if they would have the nerve to omit printing them. As you say it is politics but basically the left in the usa have become fundamentally dishonest. If it had been a republican they would have used the folk definition. But nber is just kicking the can down the road.
Noah !! great article..wanted to share this https://www.youtube.com/watch?v=FxiZRYJTEo0
We went from 6% growth under Trump to negative growth in year or two under Biden
This is nothing other than a campaign ad for the Democrats and is intellectually dishonest. This is the first time in my 7 decades on the planet that a broad base of people - and ALL OF THEM from the left - decided that the definition of a recession is something different than two quarters for negative growth. Never happened before. Certainly not in 1992 (and I might add, that recession then was over by Election Day but announced by the deep state afterwards). Remember - “it’s the economy stupid”?
No one with one eye open can’t see that this economy is in terrible shape. That’s why the left is going through wind mill action to get rid of the R word and, like the border lie a blue streak. Oh yes, the border is secure. Secure enough for 3 million illegals to sneak in this year. Oh, no, there’s no recession and things are peachy. They still count as their achievement the “growth” in jobs and economic activity that was nothing other than the return to the status quo before they shut down the economy in 2020 when everyone lost their jobs and businesses were shut down. They know they’re lying. It’s astounding. But then again, who are you gonna believe - them,more your own lying eyes,.
These people never say “a recession now would be fine” before one happens. Instead, corrupt media voices line up to defend yet another blow inflicted by the Democrats by telling us “it’s fine.” It’s not fine - not by a long shot. We shouldn’t let ourselves be fooled by media sycophants.
You end by describing this as a mild recession, but inflation is running hot. If historic measures are any indication it will take a lot more interest rate hikes to get under control, meaning we are at the start of something much more painful. On top of this, the high government debt makes for uncharted territory - a brief spike in interest rates to combat inflation may be survivable, but sustained higher interest rates will be intolerable for the federal deficit. What happens then? Letting inflation burn out of control is unthinkable; radical cuts in government payouts on the one hand or radical tax increases on the other will have either the producers or parasites up in arms (literally), and will inflict their own economic devastation either way.
I don't think inflation is the real danger any longer. Supply chain gaps are being rapidly filled, and inventories are growing. Additionally, commodities are now falling dramatically. And all thus has happened in response to a mere 75 basis point hike (before yesterday's action). That points to tremendous underlying financial fragility (probably caused by too much private debt, a problem left unresomved after 2008, when we shoukd have dealt with it).
Also worth noting the change in the Fed stance. Fed met last on June 15. Powell justified the largest Fed rate hike since 1994 on the following grounds:
The economy was strong.
Payrolls were booming.
The consumer was strong.
Weaker retail goods sales were offset by stronger services purchases.
Long-term inflation expectations were rising.
Before June 15, most of the U.S. economic data did not support Powell’s claims.
Since then, we have had an across-the-board deterioration in almost all economic indicators:
Yes, payrolls have remained ridiculously strong. But we now have a 3-month average household survey job change that is significantly negative. Whenever that has happened in the past we were already in recession. All the survey data and initial claims show considerable employment deterioration.
On June 30 the report on overall real PCE showed the same downward revisions as had retail sales, and it also showed an outright decline in real PCE in May, as has had the report on retail sales.
On inflation expectations Powell was referring to a rise in the 5-year inflation expectations in the Michigan sentiment survey to 3.3% which he said was “eye-catching”. That number was revised down to 3.1%, and the preliminary July reading is down further to 2.8% where it was before the inflation indices took off.
Since Powell spoke that June 15, most commodity prices have fallen, and many have crashed.
Since Powell spoke many economic indicators have plunged: the most recent bring new home sales with revisions, existing home sales, housing starts, the S&P Global PMIs, real construction spending, and industrial production with revisions.
The commentariat are aware of this broad sweep of bad economic news. So are market participants. Look at bonds. Bond prices crashed on the Fed’s hawkish move in mid-June. Since then, they have been rallying. They have now traced out an impressive reverse head and shoulders pattern on the verge of a breakout. The denizens of the bond market, like almost everyone else, see that the economy is not strong, but that a recession is imminent and may be underway and intensifying
With inflation at very high levels, unemployment at very low levels, and the party in power in DC antagonistic to big business, it is hard to see where "growth" will come from, at least in the short term. More government spending in an economy that has no slack labor is reckless. Imploring big business to invest capital in labor saving (and productivity enhancing) technology is feckless.
Recessions are great! keep telling yourself that !)!0+
Recessions are great! keep telling yourself that idiot
Noah, in a comment below, you state that the Fed needs to tamp down on demand even though our supply issues are quickly righting themselves. I've read this analysis elsewhere, that our inflation problem is demand-driven.
This is the very essence of what people think of as a poor economy. Demand shrinks because people decide they can't afford things that they could a year ago.
People feel the gut punch of a decrease in their standards of living. They are in a very real sense, poorer.
It's amazing to hear Democrats making the claim that this is a good economic outcome.
We should just adopt the Sahm Rule.