Posted on 07/26/2022 1:42:50 PM PDT by Oldeconomybuyer
WASHINGTON (AP) — By one common definition, the U.S. economy is on the cusp of a recession. Yet that definition isn’t the one that counts.
On Thursday, when the government estimates the gross domestic product for the April-June period, some economists think it may show that the economy shrank for a second straight quarter. That would meet a longstanding assumption for when a recession has begun.
But economists say that wouldn’t mean that a recession had started.
The definition of recession that is most widely accepted is the one determined as “a significant decline in economic activity that is spread across the economy and lasts more than a few months.” The committee assesses a wide range of factors before publicly declaring the death of an economic expansion and the birth of a recession — and it often does so well after the fact.
So if we’re not in a recession, what’s going on with the economy, which is sending frustratingly mixed signals?
Even if growth does go negative for a second straight quarter, Fed officials and Biden administration economists point to a lesser-known measure called “gross domestic income.”
GDP calculates the value of the nation’s output of goods and services by adding up spending by consumers, businesses and governments. By contrast, GDI, as the name implies, seeks to measure the same thing by assessing incomes.
Over time, the two measures should track each other. But they often diverge in the short run. In the first quarter, GDI grew 1.8% — much better than the 1.6% decline in GDP.
As part of its judgment of whether an economy is in recession, the NBER considers an average of the two measures. In the first quarter, the average was 0.2%, suggesting that the economy expanded slightly.
(Excerpt) Read more at apnews.com ...
Recession has arrived when you look at the steak cuts in Walmart and then decide, “I haven’t had SPAM in a while - Good ole SPAM.”
Economic statistics become worthless during a period of high inflation—unless the numbers are deflated by the amount of inflation during the period.
So—if the economy “grows” by 5% but the inflation rate is 10%, the economy actually shrunk by 5%.
This is how .gov can play stupid games with definition of a recession.
The economy has not grown by 10% in the past twelve months.
We are in a recession now.
Easy Peasy.
A recession is when the party in power loses more jobs than the party not in power.
It is interesting that I have been a news hound, an Economics Major in college, and lived seven decades and it is only now, when Biden is faced with disaster that I have come across someone insisting the GDI index over rules the GDP in this matter. I wonder who it writing this? The Associated Press? Urinalist Central for the Progressive Leftist wrote this now? I wonder why?
“A recovery is when Brandon loses his (job).”
LOL!!!
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