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Genuine question: At what point do we actually declare that we are in recession. Do we wait for GDP figures out these signs are enough to assume we are in bear

Genuine question: At what point do we actually declare that we are in recession. Do we wait for GDP figures out these signs are enough to assume we are in bear markets now.

jeffbee 4y ago
Real GDP has to shrink for it to be a recession. GDP in the United States is currently growing strongly. The Conference Board is not predicting a recession in the U.S. in 2022, and they just updated their forecasts a few days ago.
- mehrdada 4y ago
  > GDP in the United States is currently growing strongly Last quarter was -1.4% growth, so probably not growing strongly (but who knows, maybe just a blip...) https://www.wsj.com/articles/us-economy-gdp-growth-q1-11651108351 https://www.wsj.com/articles/us-economy-gdp-growth-q1-116511...
  - jeffbee 4y ago
    And Q2 is anticipated to be +2.1%, based on late-Q2 analyses. One quarter of stochastic sign change does not get you a recession. A more pessimistic view gives +1% for Q2: https://www.atlantafed.org/-/media/documents/cqer/researchcq/gdpnow/RealGDPTrackingSlides.pdf https://www.atlantafed.org/-/media/documents/cqer/researchcq...
    - justinzollars 4y ago
      Atlanta FED GDPNow recently downgraded expectations: https://www.atlantafed.org/cqer/research/gdpnow https://www.atlantafed.org/cqer/research/gdpnow This is typically an accurate measure.
      - jeffbee 4y ago
        Sure. And if GDP goes negative, and if employment falls etc etc then people will start saying recession. I was just trying to answer the GPs question, not predict whether or not this is a recession! By the way the official declaration by the U.S. bureaucracies of the onset of a recession typically lags the actual onset by a year or so.
bad_alloc 4y ago
Some crypto collapsing does not mean it is a recession. The exploding prices for real goods and less and less people being able to afford basic things are the indicator for that.
Johnny555 4y ago
Recession is a loosely defined economic term where the exact definition depends on who's reporting it, traditionally, it's meant 2 quarters of decline in GDP growth. But now: The NBER defines a recession as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales https://www.investopedia.com/terms/r/recession.asp https://www.investopedia.com/terms/r/recession.asp But recession is a macroeconomic term that may not reflect the actual impact on consumers -- conusumers could be suffering through an economic downturn that's not technically a "recession".
- tootie 4y ago
  Yeah, recession start and ends can only really be determined accurately in retrospect. And like you said it's marked by the decline meaning it starts when growth hits its high point and ends when it hits a low point. In terms "feeling" like a recession, it'll be more like midway through the descent until midway into a recovery. A stock market crash is frequently a leading indicator of a GDP recession though not always. We could be seeing the early signs of recession for the past six months, but we won't really know for a while.
antoniuschan99 4y ago
Politically it could be after midterms was an idea floating around
fortuna86 4y ago
Crypto was always a plaything for people that had extra money and no idea what to do with it. That extra money dries up, guess what happens to crypto.
wollsmoth 4y ago
I think the actual rule is 2 quarters of GDP decline in a row. We had one, seems like we'll have another.
Geee 4y ago
This is pretty good: https://trends.google.com/trends/explore?date=all&q=recession https://trends.google.com/trends/explore?date=all&q=recessio...
davesque 4y ago
It's a legitimate question, although I wouldn't use stories about Coinbase as any indication about the answer.
MisterBastahrd 4y ago
When growth actually slows. The stock market has little to do with whether we are in a recession. If it fell by 10K points tomorrow, most stocks would still be wildly overvalued.

Genuine question: At what point do we actually declare that we are in recession. Do we wait for GDP figures out these signs are enough to assume we are in bear markets now.

jeffbee 4y ago

Real GDP has to shrink for it to be a recession. GDP in the United States is currently growing strongly. The Conference Board is not predicting a recession in the U.S. in 2022, and they just updated their forecasts a few days ago.

mehrdada 4y ago
> GDP in the United States is currently growing strongly Last quarter was -1.4% growth, so probably not growing strongly (but who knows, maybe just a blip...) https://www.wsj.com/articles/us-economy-gdp-growth-q1-11651108351 https://www.wsj.com/articles/us-economy-gdp-growth-q1-116511...
- jeffbee 4y ago
  And Q2 is anticipated to be +2.1%, based on late-Q2 analyses. One quarter of stochastic sign change does not get you a recession. A more pessimistic view gives +1% for Q2: https://www.atlantafed.org/-/media/documents/cqer/researchcq/gdpnow/RealGDPTrackingSlides.pdf https://www.atlantafed.org/-/media/documents/cqer/researchcq...
  - justinzollars 4y ago
    Atlanta FED GDPNow recently downgraded expectations: https://www.atlantafed.org/cqer/research/gdpnow https://www.atlantafed.org/cqer/research/gdpnow This is typically an accurate measure.
    - jeffbee 4y ago
      Sure. And if GDP goes negative, and if employment falls etc etc then people will start saying recession. I was just trying to answer the GPs question, not predict whether or not this is a recession! By the way the official declaration by the U.S. bureaucracies of the onset of a recession typically lags the actual onset by a year or so.

bad_alloc 4y ago

Some crypto collapsing does not mean it is a recession. The exploding prices for real goods and less and less people being able to afford basic things are the indicator for that.

Johnny555 4y ago

Recession is a loosely defined economic term where the exact definition depends on who's reporting it, traditionally, it's meant 2 quarters of decline in GDP growth. But now: The NBER defines a recession as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales https://www.investopedia.com/terms/r/recession.asp https://www.investopedia.com/terms/r/recession.asp But recession is a macroeconomic term that may not reflect the actual impact on consumers -- conusumers could be suffering through an economic downturn that's not technically a "recession".

tootie 4y ago
Yeah, recession start and ends can only really be determined accurately in retrospect. And like you said it's marked by the decline meaning it starts when growth hits its high point and ends when it hits a low point. In terms "feeling" like a recession, it'll be more like midway through the descent until midway into a recovery. A stock market crash is frequently a leading indicator of a GDP recession though not always. We could be seeing the early signs of recession for the past six months, but we won't really know for a while.

antoniuschan99 4y ago

Politically it could be after midterms was an idea floating around

fortuna86 4y ago

Crypto was always a plaything for people that had extra money and no idea what to do with it. That extra money dries up, guess what happens to crypto.

wollsmoth 4y ago

I think the actual rule is 2 quarters of GDP decline in a row. We had one, seems like we'll have another.

Geee 4y ago

This is pretty good: https://trends.google.com/trends/explore?date=all&q=recession https://trends.google.com/trends/explore?date=all&q=recessio...

davesque 4y ago

It's a legitimate question, although I wouldn't use stories about Coinbase as any indication about the answer.

MisterBastahrd 4y ago

When growth actually slows. The stock market has little to do with whether we are in a recession. If it fell by 10K points tomorrow, most stocks would still be wildly overvalued.