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I personally think we're in recession and the reason is datapoints outside of this GDP print, what companies are saying, and the fact I know people that have be

I personally think we're in recession and the reason is datapoints outside of this GDP print, what companies are saying, and the fact I know people that have been laid off already. What I find pathetic is that saying we are in a recession is now a political stance. I think we all know that if a Republican were President the entire narrative would shift, with most of the press saying we're in recession while Fox, etc would say unemployment is still low which is what matters. How did we get to a point where actual data can be outright denied or absorbed based on your political viewpoint? It's really pathetic. People will go to the ends of the earth just to protect politicians. Worse, even if we're in recession it's pretty mild, so I don't even know why there is so much handwringing about it.

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mywittyname 4y ago
I agree that we are in a recession. >How did we get to a point where actual data can be outright denied or absorbed based on your political viewpoint? Because the actual data is sending mixed signals. People equate recessions with job losses, but job growth is still high and unemployment remains incredibly low. Businesses equate recessions with reduced demand for goods and and services, yet demand remains strong enough to push prices and profits to record levels. GDP has long been criticized for being a poor metric for the economy. But it's always been correlated enough with overall economic sentiment that it was Good Enough. It looks like we've finally gotten ourselves into a situation where the edge case issues with GDP surface. Lastly, not everyone feels recessions the same. I was one of those people who benefited from the financial crisis, because I kept my job and lived in an apartment, so my income was going up while my costs went down. That doesn't take away from the devastation it caused to other people.
- njcgbc 4y ago
  > Businesses equate recessions with reduced demand for goods and and services, yet demand remains strong This isn't true, major retailers have been reporting falling demand. I'd cite the WSJ but for some reason I can't paste the link in this box, just Google "falling demand Wal-Mart" > enough to push prices and profits to record levels. Adjust both for inflation
  - bushbaba 4y ago
    Falling demand of non-necessities. People aren't buying "TVs". Which as you call out, is a stupidly strong recessionary signal.
    - InefficientRed 4y ago
      Or, damn near every household bought a new TV during the pandemic lockdowns using their stimulus checks and now no one needs a new TV. I think Walmart's story in particular is one of stupidly bad demand forecasting.
      - njcgbc 4y ago
        Fast food is reporting the same thing, McDonald's put out a report a few days ago, Yum! Brands is yet to report results for the quarter but similar results are expected. Target had a similar report to Walmart. It is mostly discretionary spending that is down; Wal-Mart reported the largest fall in apparel iirc, but demand is demand. One would expect discretionary spending to fall first, and hopefully it stops there. Again I apologize for not providing a direct citation due to my dumb mobile browser but these are days-old news stories and it should be easy to confirm
        rustybelt 4y ago
        I know I've cut back on fast food because both product and service quality have declined dramatically, likely due to staffing shortages. Long wait times, cold food, and incorrect orders have pushed me to the point of staying away. It's a weird time, and it's hard to untangle all these additional factors. That said, I'm sure higher prices are having an impact as well.
        InefficientRed 4y ago
        Fast food is pricing itself out of the market. I think it's a great example of a sector that failed to innovate and is now incapable of providing a product worth buying at prices that are profitable. McDonalds et al. probably should've been investing a lot more in automating their kitchens. The fact that a huge percent of locations -- and all drive-thrus -- still use humans for the ordering process is, similarly, inexcusable. Unless the US massively increases its low-skilled immigration quotes, robotics firms will be the FAANG equivalents of the 2020s-2030s.
- phpisthebest 4y ago
  They are not mixed signals, the data we use for signaling is flawed for the modern area Take for example the U-3 unemployment number that you cite, what is missing from that is Workforce Participation, we have a pretty large drop-off in Work force participation which is leading to the false belief that employment is "fine", and the quote "mix signal" of being in a recession while still having lower unemployment. Completely absent from most of these older metrics is the "gig-economy" which is really screwing with the data IMO. Then you have U-6 Unemployment increasing while U-3 is dropping, I think U-3 is just a few months away from reversal and will start increasing soon >>GDP has long been criticized for being a poor metric for the economy. yes by MMT supporters that want to ignore the classic model of economics in favor of monetary manipulation for political purposes
  - kube-system 4y ago
    Of course we have a large drop off of workforce participation. Baby Boomers are retiring en masse; they’re reaching retirement age, and many of those who are close were offered buyouts to leave early. It’s not the result of decreased hiring due to economic slowdown. It’s the opposite entirely; this is a contributing factor to the labor shortage.
  - hedora 4y ago
    A reasonable definition of recession is "you can't find a job", but, not only are we in the middle of a labor shortage, traditional good-economic-times like unionization are ramping up, and people are successfully demanding raises (and some households are voluntarily moving to single incomes). On the other hand, the stock market is down this year, so if that's your definition, things are dire. Honestly, this seems like stagflation to me, which has been historically known for breaking the definition of "recession". Neither side wants to say that out loud, because it implies a decade-plus economic funk.
    - pclmulqdq 4y ago
      That is actually a really poor definition of a recession. It overlooks many macroeconomic factors that can cause severe problems. "I can't improve my economic position" seems a lot closer, while still being a bad definition, and by that definition, we are deep in a recession.
- b0mbadilh0le 4y ago
  Macro Econ 101: Unemployment is a lagging indicator. Always has been. Always will be. It's why it was silly for them to keep touting it as a measure of the economy's health. We could even enter a prolonged, severe recession with low unemployment. How? Labor force participation. If it is low enough, there aren't jobs to cut. Your last point is very valid, and much is a matter of perspective. As far as mixed data... the only data throwing a contrary signal is unemployment, previously discussed. Inflation, rising interest rates, low consumer confidence, home prices turning over (speculative market areas currently), supply chain issues, and loss of wealth effect (markets have lost approximately $30 trillion this year), are all VERY recessionary.
  - mistrial9 4y ago
    to support your statement that unemployment is a lagging indicator -- very random observation of rural Carolinas annual horse roundup and sale. They keep and publish records of a traditional county horse auction there, and the 2006-2010 years are listed. You can see a big change in the prices among these relatively unconnected people and their auction, but it is lagging by two years versus the massive credit crunch that put so many high-leverage city companies out of business.
- bshoemaker 4y ago
  - DIARRHEA_xd 4y ago
    Hey please consider changing this comment to substantively add to the discussion. Empty snark, no matter how good it feels, really isn't HNs style and doesn't promote healthy discourse. Yours truly, DIARRHEA_xd
- s1artibartfast 4y ago
  >Because the actual data is sending mixed signals. People equate recessions with job losses, but job growth is still high and unemployment remains incredibly low. The data isn't mixed, people are just making an incorrect association. Working more or longer isn't a good thing in its own right. In fact, it is bad it you are working more for less purchasing power. employment growth has historically been associated with increased purchasing power, but the current situation is a deviation from this norm. Talking about employment growth ignoring this fact is a bit of a bait and switch playing on this incorrect association.
- anamax 4y ago
  > Because the actual data is sending mixed signals. People equate recessions with job losses, but job growth is still high and unemployment remains incredibly low. The definition of "recession" doesn't depend on what other things people think happen during a recession. No one would be making this argument if it had happened while Trump was in office.
  - dragonwriter 4y ago
    > The definition of "recession" doesn't depend on what other things people think happen during a recession. It absolutely does depend on the factors that NBER has always looked at to judge recessions, like employment. > No one would be making this argument if it had happened while Trump was in office. That's a nonfalsifiable statement that does nothing but show your own political bias.
    - knewter 4y ago
      It's nonfalsifiable but not for the reason you think :)
    - anamax 4y ago
      > That's a nonfalsifiable statement that does nothing but show your own political bias. It's political bias to notice that people behave politically? Is it political bias to notice Republicans complain about the deficit when Democrats are in power or is it only political bias to notice that that Democrats complain about the deficit when Republicans are in power ?
InefficientRed 4y ago
Descriptions of economic conditions are obviously politicized. This was probably always true to an extent, but it really took off during the early Obama years. That said... my wealth manager has been and still is waffling when I ask him if we are in a recession. It's NOT just political; I don't even know my wealth manager's politics and I have absolutely no doubt he puts fiduciary responsibilities first and makes fact-based assessments. Unemployment is low and the trend is mostly flat. Housing is doing fine. Consumer balance sheets are strong. Are we entering a recession? I think so. But there are a lot of "but"s which really do impact how smart and impartial people are thinking about where and how to deploy capital. When I ask my wealth manager "are we in a recession?", he basically says "We might be in a recession. We might not be in a recession. Either way, we should not invest as if this is a typical recession." Which I think pretty much sums things up.
- camhart 4y ago
  > Consumer balance sheets are strong. Consumer debt is at record highs for overall debt, and household credit card debt is climbing towards record levels. https://www.google.com/amp/s/www.cnbc.com/amp/2022/05/10/household-debt-nears-16-trillion-despite-rising-rates-and-inflation.html https://www.google.com/amp/s/www.cnbc.com/amp/2022/05/10/hou... https://www.google.com/amp/s/www.cnbc.com/amp/2022/05/10/consumer-credit-card-debt-near-an-all-time-high.html https://www.google.com/amp/s/www.cnbc.com/amp/2022/05/10/con...
  - tfehring 4y ago
    The fastest-growing (and largest) category of that debt was mortgage debt, which is probably a positive economic indicator if anything, though note that that's based on Q1 data. Household debt servicing costs as a percent of disposable income are still lower than at any point between 1980 (the earliest data available) and the start of the pandemic. https://fred.stlouisfed.org/series/TDSP https://fred.stlouisfed.org/series/TDSP Also keep in mind that those debt figures are in nominal USD. One positive effect of inflation is that it reduces the real cost of paying off debt.
    - 4y ago
MisterBastahrd 4y ago
We have a well established definition for what a recession is, and none of it has to do with anecdotes or political grudges.
rockemsockem 4y ago
I've seen the word recession thrown around plenty in the press; who's avoiding saying it? As pointed out by another commenter the NBER has never failed to declare a recession after two consecutive quarters of GDP reduction. This is a preliminary report, I would expect them to wait for the full report to actually declare it. These things work a certain way. Whether that way is good or bad isn't relevant to this particular point, by expecting that way to change on a whim you're just being impatient.
- seizethegdgap 4y ago
  > who's avoiding saying it? No one is avoiding saying the word "recession". The current Executive Branch and Federal Reserve are both avoiding saying we are in a recession.
  - sangnoir 4y ago
    Aren't recesssions - by necessity, always declared retrospectively? Or at least after they have already started, due to how they are measured.
- ConceitedCode 4y ago
  > As pointed out by another commenter the NBER has never failed to declare a recession after two consecutive quarters of GDP reduction. That isn't 100% accurate. There is 1 example from 1947 where we had two consecutive quarters of negative GDP, but positive jobs, positive industrial production and positive consumer spending and NBER doesn't consider it a recession. 2001 was the opposite. It was called a recession without consecutive 2 quarters of negative GDP growth. [1] [1] https://en.wikipedia.org/wiki/Early_2000s_recession#/media/File:Recession2001.PNG https://en.wikipedia.org/wiki/Early_2000s_recession#/media/F...
  - dragonwriter 4y ago
    > 2001 was the opposite. It was called a recession without consecutive 2 quarters of negative GDP growth. Also 2020, and that wasn't even two down quarters with a gap; the whole recession was 2 months long.
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tfehring 4y ago
Because for better or worse, while some other countries have purely formulaic recession criteria, the US doesn't. This can swing either way - the US never experienced two consecutive quarters of negative real GDP growth during the 2001 recession, for example. No one is denying that real GDP has shrunk for two consecutive quarters, they're just correctly pointing out that that's not how the US government defines a recession. My impression is that layoffs have been mostly isolated to tech at this point. I do know a couple of recruiters (outside of tech) who've been laid off lately, so that could be the canary. But my impression is that all of the quantitative labor market indicators we have are still strong - likely stronger than we've ever seen in a recession.
rvz 4y ago
> How did we get to a point where actual data can be outright denied or absorbed based on your political viewpoint? It's really pathetic. People will go to the ends of the earth just to protect politicians. Worse, even if we're in recession it's pretty mild, so I don't even know why there is so much handwringing about it. That's because all politicians are liars and the media spin doctors will ensure that their lies gaslight the general public into believing them. The problem is, they can't deny the numbers and they know it, hence why they are beginning to change definitions. Given the last administration brought the US into a recession 2 years ago with the same opposition, media and critics screaming at them, there is no more denying that this is a recession with these figures. The difference is, the current administration is trying to escape by changing definitions, which doesn't give much confidence in them and indicates that it may get even worse. Now you see the same ones down-playing the inflation fears in November 2021 are trying to down play this recession very poorly with lots of damage control to save themselves and their careers. In reality we were no better off, and it looks like this is worse than the last administration. And finally, the indicators for this with surging inflation was there since November 2021. Instead we have 'Stock market up 1% today on both this news and decades-high inflation.' [0] and later 'We are most certainly not in a recession.' [1]. Not only you have to look at it in the long term - not in 1 day, but you also don't wait for the figures to come out for you to then prepare for the worst. By then it is too late. The denial is indeed pathetic. [0] https://news.ycombinator.com/item?id=29508238 https://news.ycombinator.com/item?id=29508238 [1] https://news.ycombinator.com/item?id=31441710 https://news.ycombinator.com/item?id=31441710
throwaway6734 4y ago
The average american does not know the technical definition of what a recession is. They just know recessions are bad. Whether or not it's acknowledged we're officially in a recession can itself have negative economic impacts due to panic. Also, Powell himself has been iffy about whether or not we're in a recession
mym1990 4y ago
Hasn't the economy always been part of a political stance? The economy is one of the top 2/3 factors that people consider when voting, hence being important for re-election. It would be in the best interest of anyone trying to run for election to strategically paint a good/bad picture of the economy. This has been the case probably going back to the 1930s if I were to guess.
- partiallypro 4y ago
  It certainly impacts people's votes, but when I go to a news site I don't think in the 70s, 80s, etc you'd find people trying so very hard to say a contracting economy is just a "transition" and not a recession. My point is mostly on what the press is doing in their reporting and trying to protect the current party in power ahead of the mid-terms. I know it would be the opposite if things were reversed, with Fox denying the economic reality. I just find it pretty pathetic. What would be the harm in reporting we are in a mild recession other than it runs counter to the White House? The press is one of the most loathed things in the country and they always seem to dig their grave even deeper.
  - mym1990 4y ago
    I see what you're saying as I reflect on the current landscape of media in general. To be fair I was born in the 90s, so no real idea of what the media landscape was pre-2000s basically. The media now is obviously much different, no internet back in the 70s, news sources were seemingly more trustworthy, there was maybe less political division? To run a counterpoint though, recessions are self-reinforcing. I think what the Fed has tried to do with all its might is to keep the picture as rosy as possible. Once it is officially out there, companies start cutting budgets, people tighten their wallets anticipating harder times, and it just kind of goes in a few cycles like this.
  - snikeris 4y ago
    I also find it pathetic. However the press is open to enterprising individuals. We don’t have to keep patronizing the same lousy news outlets. Who’s got the real scoop these days?
smilebot 4y ago
/opinion without any evidence I like to believe that there is a bigger picture here. Oversimplification: An economic downturn when there is a rise in nationalist sentiment had given birth to people like hitler. Maybe if the majority perceives that everything is fine, when it isn’t, might help prevent that?
seanmcdirmid 4y ago
> Worse, even if we're in recession it's pretty mild, so I don't even know why there is so much handwringing about it. Ideologies tend to deal in binaries. We are either in a recession and the sky is about to fall or everything is great. Jobless recoveries or full employment recessions don't fit into binary narratives.
rayiner 4y ago
> How did we get to a point where actual data can be outright denied or absorbed based on your political viewpoint? Our elites—I don’t mean that pejoratively, but descriptively—used to adhere to institutional values. When I joined a prominent NYC law firm 10 years ago nobody commented on the fact that it was named after someone who argued the pro-segregation other side of Brown v. Board. The institution, not only of the firm but the legal process itself-where even segregationists are entitled to their day in court—was a credo that transcended individual politics or individual notions of “justice” or “human rights.” That flipped sometime in the last decade. Our institutions have been overtaken my millenarianism: https://en.wikipedia.org/wiki/Millenarianism https://en.wikipedia.org/wiki/Millenarianism. It’s a belief system that transcends institutional values—in the law, the media, everywhere. Do you remember “The Resistance?” Where Clinton-supporting government employees pledged to work within the bureaucracy to defeat the agenda of the duly elected President—their boss? The craziness we’ve been seeing from conservatives lately is a reaction to that total abandonment of institutional values.
- p_j_w 4y ago
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  - RspecMAuthortah 4y ago
    This is part of the problem that the parent comment is referring to - putting all conservatives under the same umbrella. Tea party is different from most Trump voting working class. Conservatism in recent era has taken a very distinct shape and failure to understand this by elites have led to this very phenomenon the comment you replied to is referring to. How do you explain a non-negligible part of middle of America who voted for Obama voting for Trump? As far as I am concerned, Tea Party acted in a capacity within the institution. The stuff we have seen under Trump including leaking secret military orders just to bring Trump down shows an absurd amount of collusion of institutional bureaucracy, media, corporate powers and security forces (such as FBI) which was unthinkable a decade ago and erodes the core values and credibilities of those institutions. For example, a decade ago FBI was a revered institution by conservatives who would go at length to support its over reaching acts and its the liberals who would question them. How did the table turn so bad that FBI is now actively being used as a force to silence opposition arresting anyone they like in the middle of night in their underwear while inviting media camera crews?
s1artibartfast 4y ago
I fundamentally don't understand how low unemployment is a counterclaim against economic recession. This is like saying sure you can't buy as much bread, but at least you are working longer. The fact that more people are working to produce less than before describes an economy in decline. What am I missing here?
- vharuck 4y ago
  Low unemployment means there are plenty of jobs available. Those jobs are available because employers believe they can increase revenue by shelling out more money on headcount. So those employers believe there's still money to be made in the market.
  - s1artibartfast 4y ago
    That's an interesting take I'll have to give some more thought to. I don't think that it's clear that employers think the economy will grow in a way that yields more abundant and cheaper Goods. Maybe I'm Wrong and we'll see in GDP outpacing inflation from all of the new jobs. Maybe they just haven't had a chance to materialize in real GDP growth
- 8note 4y ago
  GDP is an averaging function, that doesn't show the underlying distribution. Poor people can be doing better while rich people are doing worse. Since economic activity is mostly about how the ultrawealthy are doing, there's always a recession when they're doing badly
  - s1artibartfast 4y ago
    That's an interesting thought. Do you think poor people are helped more by the employment numbers than hurt by the inflation?
- idontpost 4y ago
  Unemployment isn't low because more people are working. It's low because retiring Boomers shrank the labor force. Fewer workers = less production. Fewer people looking for work = low unemployment.
RC_ITR 4y ago
> What I find pathetic is that saying we are in a recession is now a political stance. This is such a weird information play. Recessions are defined after the fact by NBER. Always have. Always will be. There’s no set criteria. Informally people cite the two quarters rule, but 2/5 past recessions (2000 and 2020) don’t follow that rule. No one wants to communicate that nuance so we get mass confusion. Sad to see that confusion even exists in HN. What’s actually concerning to me is exactly that: every nuanced discussion in politics is now some gotcha where a reporter asks “yes or no” to a question that has a detailed answer.
babypuncher 4y ago
I think most of the recession talk is trying to drum up fears of 2007-2009. If we are in a recession, it's a pretty mild one. But that won't stop people from pretending that the sky is falling in order to motivate voters.
- pclmulqdq 4y ago
  Welcome to the average recession. They usually aren't that bad for people outside of a certain small sector that gets hit hard. This time it was the crypto bros.
ffggvv 4y ago
yes i have a hard time seeing robert reich arguing that unemployment is what matters if trump was in office and midterms were 4 months away
- qqqwerty 4y ago
  How much air time is Fox News spending on the falling gas prices? How much time did they spend on the subject when prices were rising? Also, his latest tweet on the subject seems pretty balanced: https://twitter.com/RBReich/status/1552739457433972737?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet https://twitter.com/RBReich/status/1552739457433972737?ref_s...
  - ffggvv 4y ago
    lol that’s pretty funny. forgot he’s the type that just wants the govt to keep printing money despite the massive inflation. that’s the number one goal in his life. and yes fox news is right leaning but atleast they’re open about it. and a 10% drop after a 2x increase isn’t that exciting
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smsm42 4y ago
That's why it is important to have some verifiable agreed upon definitions. "Two quarters of negative growth" is something that anybody can understand and validate. Too simplistic? OK, make it more complex formula, whatever - but make it a formula, and make it fixed, so people can be sure neither Rs nor Ds can game it (at least not easily). Instead what we're getting is "holistic criteria" which means pundits can argue on TV for hours (which they probably love to) and everybody gets to keep their partisan views and there's no objective meaning to any terms anymore. No wonder people have low confidence in "experts" and grasp at whatever they find on the internet to find some clarity.
- 8note 4y ago
  I'm not clear that "in a recession" is a particularly useful state to anyone. Even with a complex formula, you're still dropping the useful details. Even with a predictable complicated formula, you still have the question to debate: "does it matter?"
  - smsm42 4y ago
    People like certainty more than uncertainty, even if it's a bad certainty. That's why the have all these classifiers. It's easier to handle two situations "we're in a recession, we're not in a recession" than track about 50 economic parameters that are interwoven in a thousand complex ways. If you are a professional economist, you probably need to do the latter, but if you are a regular person, you probably have neither time nor capability to do it.
roflyear 4y ago
You're making it political with your comments, then you are surprised it is political? Hah
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mywittyname 4y ago

I agree that we are in a recession. >How did we get to a point where actual data can be outright denied or absorbed based on your political viewpoint? Because the actual data is sending mixed signals. People equate recessions with job losses, but job growth is still high and unemployment remains incredibly low. Businesses equate recessions with reduced demand for goods and and services, yet demand remains strong enough to push prices and profits to record levels. GDP has long been criticized for being a poor metric for the economy. But it's always been correlated enough with overall economic sentiment that it was Good Enough. It looks like we've finally gotten ourselves into a situation where the edge case issues with GDP surface. Lastly, not everyone feels recessions the same. I was one of those people who benefited from the financial crisis, because I kept my job and lived in an apartment, so my income was going up while my costs went down. That doesn't take away from the devastation it caused to other people.

njcgbc 4y ago
> Businesses equate recessions with reduced demand for goods and and services, yet demand remains strong This isn't true, major retailers have been reporting falling demand. I'd cite the WSJ but for some reason I can't paste the link in this box, just Google "falling demand Wal-Mart" > enough to push prices and profits to record levels. Adjust both for inflation
- bushbaba 4y ago
  Falling demand of non-necessities. People aren't buying "TVs". Which as you call out, is a stupidly strong recessionary signal.
  - InefficientRed 4y ago
    Or, damn near every household bought a new TV during the pandemic lockdowns using their stimulus checks and now no one needs a new TV. I think Walmart's story in particular is one of stupidly bad demand forecasting.
    - njcgbc 4y ago
      Fast food is reporting the same thing, McDonald's put out a report a few days ago, Yum! Brands is yet to report results for the quarter but similar results are expected. Target had a similar report to Walmart. It is mostly discretionary spending that is down; Wal-Mart reported the largest fall in apparel iirc, but demand is demand. One would expect discretionary spending to fall first, and hopefully it stops there. Again I apologize for not providing a direct citation due to my dumb mobile browser but these are days-old news stories and it should be easy to confirm
      - rustybelt 4y ago
        I know I've cut back on fast food because both product and service quality have declined dramatically, likely due to staffing shortages. Long wait times, cold food, and incorrect orders have pushed me to the point of staying away. It's a weird time, and it's hard to untangle all these additional factors. That said, I'm sure higher prices are having an impact as well.
        InefficientRed 4y ago
        Fast food is pricing itself out of the market. I think it's a great example of a sector that failed to innovate and is now incapable of providing a product worth buying at prices that are profitable. McDonalds et al. probably should've been investing a lot more in automating their kitchens. The fact that a huge percent of locations -- and all drive-thrus -- still use humans for the ordering process is, similarly, inexcusable. Unless the US massively increases its low-skilled immigration quotes, robotics firms will be the FAANG equivalents of the 2020s-2030s.
phpisthebest 4y ago
They are not mixed signals, the data we use for signaling is flawed for the modern area Take for example the U-3 unemployment number that you cite, what is missing from that is Workforce Participation, we have a pretty large drop-off in Work force participation which is leading to the false belief that employment is "fine", and the quote "mix signal" of being in a recession while still having lower unemployment. Completely absent from most of these older metrics is the "gig-economy" which is really screwing with the data IMO. Then you have U-6 Unemployment increasing while U-3 is dropping, I think U-3 is just a few months away from reversal and will start increasing soon >>GDP has long been criticized for being a poor metric for the economy. yes by MMT supporters that want to ignore the classic model of economics in favor of monetary manipulation for political purposes
- kube-system 4y ago
  Of course we have a large drop off of workforce participation. Baby Boomers are retiring en masse; they’re reaching retirement age, and many of those who are close were offered buyouts to leave early. It’s not the result of decreased hiring due to economic slowdown. It’s the opposite entirely; this is a contributing factor to the labor shortage.
- hedora 4y ago
  A reasonable definition of recession is "you can't find a job", but, not only are we in the middle of a labor shortage, traditional good-economic-times like unionization are ramping up, and people are successfully demanding raises (and some households are voluntarily moving to single incomes). On the other hand, the stock market is down this year, so if that's your definition, things are dire. Honestly, this seems like stagflation to me, which has been historically known for breaking the definition of "recession". Neither side wants to say that out loud, because it implies a decade-plus economic funk.
  - pclmulqdq 4y ago
    That is actually a really poor definition of a recession. It overlooks many macroeconomic factors that can cause severe problems. "I can't improve my economic position" seems a lot closer, while still being a bad definition, and by that definition, we are deep in a recession.
b0mbadilh0le 4y ago
Macro Econ 101: Unemployment is a lagging indicator. Always has been. Always will be. It's why it was silly for them to keep touting it as a measure of the economy's health. We could even enter a prolonged, severe recession with low unemployment. How? Labor force participation. If it is low enough, there aren't jobs to cut. Your last point is very valid, and much is a matter of perspective. As far as mixed data... the only data throwing a contrary signal is unemployment, previously discussed. Inflation, rising interest rates, low consumer confidence, home prices turning over (speculative market areas currently), supply chain issues, and loss of wealth effect (markets have lost approximately $30 trillion this year), are all VERY recessionary.
- mistrial9 4y ago
  to support your statement that unemployment is a lagging indicator -- very random observation of rural Carolinas annual horse roundup and sale. They keep and publish records of a traditional county horse auction there, and the 2006-2010 years are listed. You can see a big change in the prices among these relatively unconnected people and their auction, but it is lagging by two years versus the massive credit crunch that put so many high-leverage city companies out of business.
bshoemaker 4y ago
- DIARRHEA_xd 4y ago
  Hey please consider changing this comment to substantively add to the discussion. Empty snark, no matter how good it feels, really isn't HNs style and doesn't promote healthy discourse. Yours truly, DIARRHEA_xd
s1artibartfast 4y ago
>Because the actual data is sending mixed signals. People equate recessions with job losses, but job growth is still high and unemployment remains incredibly low. The data isn't mixed, people are just making an incorrect association. Working more or longer isn't a good thing in its own right. In fact, it is bad it you are working more for less purchasing power. employment growth has historically been associated with increased purchasing power, but the current situation is a deviation from this norm. Talking about employment growth ignoring this fact is a bit of a bait and switch playing on this incorrect association.
anamax 4y ago
> Because the actual data is sending mixed signals. People equate recessions with job losses, but job growth is still high and unemployment remains incredibly low. The definition of "recession" doesn't depend on what other things people think happen during a recession. No one would be making this argument if it had happened while Trump was in office.
- dragonwriter 4y ago
  > The definition of "recession" doesn't depend on what other things people think happen during a recession. It absolutely does depend on the factors that NBER has always looked at to judge recessions, like employment. > No one would be making this argument if it had happened while Trump was in office. That's a nonfalsifiable statement that does nothing but show your own political bias.
  - knewter 4y ago
    It's nonfalsifiable but not for the reason you think :)
  - anamax 4y ago
    > That's a nonfalsifiable statement that does nothing but show your own political bias. It's political bias to notice that people behave politically? Is it political bias to notice Republicans complain about the deficit when Democrats are in power or is it only political bias to notice that that Democrats complain about the deficit when Republicans are in power ?

InefficientRed 4y ago

Descriptions of economic conditions are obviously politicized. This was probably always true to an extent, but it really took off during the early Obama years. That said... my wealth manager has been and still is waffling when I ask him if we are in a recession. It's NOT just political; I don't even know my wealth manager's politics and I have absolutely no doubt he puts fiduciary responsibilities first and makes fact-based assessments. Unemployment is low and the trend is mostly flat. Housing is doing fine. Consumer balance sheets are strong. Are we entering a recession? I think so. But there are a lot of "but"s which really do impact how smart and impartial people are thinking about where and how to deploy capital. When I ask my wealth manager "are we in a recession?", he basically says "We might be in a recession. We might not be in a recession. Either way, we should not invest as if this is a typical recession." Which I think pretty much sums things up.

camhart 4y ago
> Consumer balance sheets are strong. Consumer debt is at record highs for overall debt, and household credit card debt is climbing towards record levels. https://www.google.com/amp/s/www.cnbc.com/amp/2022/05/10/household-debt-nears-16-trillion-despite-rising-rates-and-inflation.html https://www.google.com/amp/s/www.cnbc.com/amp/2022/05/10/hou... https://www.google.com/amp/s/www.cnbc.com/amp/2022/05/10/consumer-credit-card-debt-near-an-all-time-high.html https://www.google.com/amp/s/www.cnbc.com/amp/2022/05/10/con...
- tfehring 4y ago
  The fastest-growing (and largest) category of that debt was mortgage debt, which is probably a positive economic indicator if anything, though note that that's based on Q1 data. Household debt servicing costs as a percent of disposable income are still lower than at any point between 1980 (the earliest data available) and the start of the pandemic. https://fred.stlouisfed.org/series/TDSP https://fred.stlouisfed.org/series/TDSP Also keep in mind that those debt figures are in nominal USD. One positive effect of inflation is that it reduces the real cost of paying off debt.
  - 4y ago

MisterBastahrd 4y ago

We have a well established definition for what a recession is, and none of it has to do with anecdotes or political grudges.

rockemsockem 4y ago

I've seen the word recession thrown around plenty in the press; who's avoiding saying it? As pointed out by another commenter the NBER has never failed to declare a recession after two consecutive quarters of GDP reduction. This is a preliminary report, I would expect them to wait for the full report to actually declare it. These things work a certain way. Whether that way is good or bad isn't relevant to this particular point, by expecting that way to change on a whim you're just being impatient.

seizethegdgap 4y ago
> who's avoiding saying it? No one is avoiding saying the word "recession". The current Executive Branch and Federal Reserve are both avoiding saying we are in a recession.
- sangnoir 4y ago
  Aren't recesssions - by necessity, always declared retrospectively? Or at least after they have already started, due to how they are measured.
ConceitedCode 4y ago
> As pointed out by another commenter the NBER has never failed to declare a recession after two consecutive quarters of GDP reduction. That isn't 100% accurate. There is 1 example from 1947 where we had two consecutive quarters of negative GDP, but positive jobs, positive industrial production and positive consumer spending and NBER doesn't consider it a recession. 2001 was the opposite. It was called a recession without consecutive 2 quarters of negative GDP growth. [1] [1] https://en.wikipedia.org/wiki/Early_2000s_recession#/media/File:Recession2001.PNG https://en.wikipedia.org/wiki/Early_2000s_recession#/media/F...
- dragonwriter 4y ago
  > 2001 was the opposite. It was called a recession without consecutive 2 quarters of negative GDP growth. Also 2020, and that wasn't even two down quarters with a gap; the whole recession was 2 months long.

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tfehring 4y ago

Because for better or worse, while some other countries have purely formulaic recession criteria, the US doesn't. This can swing either way - the US never experienced two consecutive quarters of negative real GDP growth during the 2001 recession, for example. No one is denying that real GDP has shrunk for two consecutive quarters, they're just correctly pointing out that that's not how the US government defines a recession. My impression is that layoffs have been mostly isolated to tech at this point. I do know a couple of recruiters (outside of tech) who've been laid off lately, so that could be the canary. But my impression is that all of the quantitative labor market indicators we have are still strong - likely stronger than we've ever seen in a recession.

rvz 4y ago

> How did we get to a point where actual data can be outright denied or absorbed based on your political viewpoint? It's really pathetic. People will go to the ends of the earth just to protect politicians. Worse, even if we're in recession it's pretty mild, so I don't even know why there is so much handwringing about it. That's because all politicians are liars and the media spin doctors will ensure that their lies gaslight the general public into believing them. The problem is, they can't deny the numbers and they know it, hence why they are beginning to change definitions. Given the last administration brought the US into a recession 2 years ago with the same opposition, media and critics screaming at them, there is no more denying that this is a recession with these figures. The difference is, the current administration is trying to escape by changing definitions, which doesn't give much confidence in them and indicates that it may get even worse. Now you see the same ones down-playing the inflation fears in November 2021 are trying to down play this recession very poorly with lots of damage control to save themselves and their careers. In reality we were no better off, and it looks like this is worse than the last administration. And finally, the indicators for this with surging inflation was there since November 2021. Instead we have 'Stock market up 1% today on both this news and decades-high inflation.' [0] and later 'We are most certainly not in a recession.' [1]. Not only you have to look at it in the long term - not in 1 day, but you also don't wait for the figures to come out for you to then prepare for the worst. By then it is too late. The denial is indeed pathetic. [0] https://news.ycombinator.com/item?id=29508238 https://news.ycombinator.com/item?id=29508238 [1] https://news.ycombinator.com/item?id=31441710 https://news.ycombinator.com/item?id=31441710

throwaway6734 4y ago

The average american does not know the technical definition of what a recession is. They just know recessions are bad. Whether or not it's acknowledged we're officially in a recession can itself have negative economic impacts due to panic. Also, Powell himself has been iffy about whether or not we're in a recession

mym1990 4y ago

Hasn't the economy always been part of a political stance? The economy is one of the top 2/3 factors that people consider when voting, hence being important for re-election. It would be in the best interest of anyone trying to run for election to strategically paint a good/bad picture of the economy. This has been the case probably going back to the 1930s if I were to guess.

partiallypro 4y ago
It certainly impacts people's votes, but when I go to a news site I don't think in the 70s, 80s, etc you'd find people trying so very hard to say a contracting economy is just a "transition" and not a recession. My point is mostly on what the press is doing in their reporting and trying to protect the current party in power ahead of the mid-terms. I know it would be the opposite if things were reversed, with Fox denying the economic reality. I just find it pretty pathetic. What would be the harm in reporting we are in a mild recession other than it runs counter to the White House? The press is one of the most loathed things in the country and they always seem to dig their grave even deeper.
- mym1990 4y ago
  I see what you're saying as I reflect on the current landscape of media in general. To be fair I was born in the 90s, so no real idea of what the media landscape was pre-2000s basically. The media now is obviously much different, no internet back in the 70s, news sources were seemingly more trustworthy, there was maybe less political division? To run a counterpoint though, recessions are self-reinforcing. I think what the Fed has tried to do with all its might is to keep the picture as rosy as possible. Once it is officially out there, companies start cutting budgets, people tighten their wallets anticipating harder times, and it just kind of goes in a few cycles like this.
- snikeris 4y ago
  I also find it pathetic. However the press is open to enterprising individuals. We don’t have to keep patronizing the same lousy news outlets. Who’s got the real scoop these days?

smilebot 4y ago

/opinion without any evidence I like to believe that there is a bigger picture here. Oversimplification: An economic downturn when there is a rise in nationalist sentiment had given birth to people like hitler. Maybe if the majority perceives that everything is fine, when it isn’t, might help prevent that?

seanmcdirmid 4y ago

> Worse, even if we're in recession it's pretty mild, so I don't even know why there is so much handwringing about it. Ideologies tend to deal in binaries. We are either in a recession and the sky is about to fall or everything is great. Jobless recoveries or full employment recessions don't fit into binary narratives.

rayiner 4y ago

> How did we get to a point where actual data can be outright denied or absorbed based on your political viewpoint? Our elites—I don’t mean that pejoratively, but descriptively—used to adhere to institutional values. When I joined a prominent NYC law firm 10 years ago nobody commented on the fact that it was named after someone who argued the pro-segregation other side of Brown v. Board. The institution, not only of the firm but the legal process itself-where even segregationists are entitled to their day in court—was a credo that transcended individual politics or individual notions of “justice” or “human rights.” That flipped sometime in the last decade. Our institutions have been overtaken my millenarianism: https://en.wikipedia.org/wiki/Millenarianism https://en.wikipedia.org/wiki/Millenarianism. It’s a belief system that transcends institutional values—in the law, the media, everywhere. Do you remember “The Resistance?” Where Clinton-supporting government employees pledged to work within the bureaucracy to defeat the agenda of the duly elected President—their boss? The craziness we’ve been seeing from conservatives lately is a reaction to that total abandonment of institutional values.

p_j_w 4y ago
[flagged]
- RspecMAuthortah 4y ago
  This is part of the problem that the parent comment is referring to - putting all conservatives under the same umbrella. Tea party is different from most Trump voting working class. Conservatism in recent era has taken a very distinct shape and failure to understand this by elites have led to this very phenomenon the comment you replied to is referring to. How do you explain a non-negligible part of middle of America who voted for Obama voting for Trump? As far as I am concerned, Tea Party acted in a capacity within the institution. The stuff we have seen under Trump including leaking secret military orders just to bring Trump down shows an absurd amount of collusion of institutional bureaucracy, media, corporate powers and security forces (such as FBI) which was unthinkable a decade ago and erodes the core values and credibilities of those institutions. For example, a decade ago FBI was a revered institution by conservatives who would go at length to support its over reaching acts and its the liberals who would question them. How did the table turn so bad that FBI is now actively being used as a force to silence opposition arresting anyone they like in the middle of night in their underwear while inviting media camera crews?

s1artibartfast 4y ago

I fundamentally don't understand how low unemployment is a counterclaim against economic recession. This is like saying sure you can't buy as much bread, but at least you are working longer. The fact that more people are working to produce less than before describes an economy in decline. What am I missing here?

vharuck 4y ago
Low unemployment means there are plenty of jobs available. Those jobs are available because employers believe they can increase revenue by shelling out more money on headcount. So those employers believe there's still money to be made in the market.
- s1artibartfast 4y ago
  That's an interesting take I'll have to give some more thought to. I don't think that it's clear that employers think the economy will grow in a way that yields more abundant and cheaper Goods. Maybe I'm Wrong and we'll see in GDP outpacing inflation from all of the new jobs. Maybe they just haven't had a chance to materialize in real GDP growth
8note 4y ago
GDP is an averaging function, that doesn't show the underlying distribution. Poor people can be doing better while rich people are doing worse. Since economic activity is mostly about how the ultrawealthy are doing, there's always a recession when they're doing badly
- s1artibartfast 4y ago
  That's an interesting thought. Do you think poor people are helped more by the employment numbers than hurt by the inflation?
idontpost 4y ago
Unemployment isn't low because more people are working. It's low because retiring Boomers shrank the labor force. Fewer workers = less production. Fewer people looking for work = low unemployment.

RC_ITR 4y ago

> What I find pathetic is that saying we are in a recession is now a political stance. This is such a weird information play. Recessions are defined after the fact by NBER. Always have. Always will be. There’s no set criteria. Informally people cite the two quarters rule, but 2/5 past recessions (2000 and 2020) don’t follow that rule. No one wants to communicate that nuance so we get mass confusion. Sad to see that confusion even exists in HN. What’s actually concerning to me is exactly that: every nuanced discussion in politics is now some gotcha where a reporter asks “yes or no” to a question that has a detailed answer.

babypuncher 4y ago

I think most of the recession talk is trying to drum up fears of 2007-2009. If we are in a recession, it's a pretty mild one. But that won't stop people from pretending that the sky is falling in order to motivate voters.

pclmulqdq 4y ago
Welcome to the average recession. They usually aren't that bad for people outside of a certain small sector that gets hit hard. This time it was the crypto bros.

ffggvv 4y ago

yes i have a hard time seeing robert reich arguing that unemployment is what matters if trump was in office and midterms were 4 months away

qqqwerty 4y ago
How much air time is Fox News spending on the falling gas prices? How much time did they spend on the subject when prices were rising? Also, his latest tweet on the subject seems pretty balanced: https://twitter.com/RBReich/status/1552739457433972737?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet https://twitter.com/RBReich/status/1552739457433972737?ref_s...
- ffggvv 4y ago
  lol that’s pretty funny. forgot he’s the type that just wants the govt to keep printing money despite the massive inflation. that’s the number one goal in his life. and yes fox news is right leaning but atleast they’re open about it. and a 10% drop after a 2x increase isn’t that exciting

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smsm42 4y ago

That's why it is important to have some verifiable agreed upon definitions. "Two quarters of negative growth" is something that anybody can understand and validate. Too simplistic? OK, make it more complex formula, whatever - but make it a formula, and make it fixed, so people can be sure neither Rs nor Ds can game it (at least not easily). Instead what we're getting is "holistic criteria" which means pundits can argue on TV for hours (which they probably love to) and everybody gets to keep their partisan views and there's no objective meaning to any terms anymore. No wonder people have low confidence in "experts" and grasp at whatever they find on the internet to find some clarity.

8note 4y ago
I'm not clear that "in a recession" is a particularly useful state to anyone. Even with a complex formula, you're still dropping the useful details. Even with a predictable complicated formula, you still have the question to debate: "does it matter?"
- smsm42 4y ago
  People like certainty more than uncertainty, even if it's a bad certainty. That's why the have all these classifiers. It's easier to handle two situations "we're in a recession, we're not in a recession" than track about 50 economic parameters that are interwoven in a thousand complex ways. If you are a professional economist, you probably need to do the latter, but if you are a regular person, you probably have neither time nor capability to do it.

roflyear 4y ago

You're making it political with your comments, then you are surprised it is political? Hah

deleted 4y ago

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