A Weird Recession

Soft Landing, RIP

Mild and Brief

Consumer Shift

Longer and Deeper

Productivity Problem

Cleveland and British Columbia

Professional economists, perhaps tired of being asked, years ago formed a committee to officially mark the beginning and end of recessions, the NBER (Nation Bureau of Economic Research) committee considers a variety of data, but its final decision is subjective.

Many of those who pay attention prefer a more objective rule, such as “two consecutive quarters of declining Gross Domestic Product.” That’s as good as any, but of course GDP itself is a flawed statistic.

This week’s initial estimate for Q2 GDP, coming after a -1.6% decline in Q1, showed another -0.9% drop, both annualized. This was an advance estimate that will be revised, but there can be revisions years later as well.

While it’s likely we are already in an as-yet-undeclared recession, it’s a very weird one if so. I have lived through quite a few of them and I don’t recall any other recession coinciding with record-low unemployment, plentiful job openings, and jammed airports.

That said, recessions vary in depth and duration. Some recessions are deep and hard to escape. This chart from my friends at Bain Macro Trends Group shows recessions by depth since WW2.

Source: Bain & Co.

Note that the recessions in red are when the Fed was actually tightening into or during a recession. Also, the chart shows the average for the entire recession, not the worst single quarter.