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Then the "two quarters" rule is stricter. We have fulfilled a stricter criterion for a recession. Whether the NBER contradicts us is irrelevant. Less value is
by danuker 4y ago
Then the "two quarters" rule is stricter. We have fulfilled a stricter criterion for a recession.
Whether the NBER contradicts us is irrelevant. Less value is going around in the economy.
- mywittyname 4y agoI mean, if you're going to stick to the two-consecutive quarters definition, then you would be saying that we were in a recession, and are now out of one. Third quarter GDP estimates stand at 1.9% growth.
- sieabahlpark 4y agoEstimates or reported? The recession based on two consecutive quarters is on reports not estimates of what is to be reported.
- mywittyname 4y agoReported as of current monthly figures. Estimates are even higher. Keep in mind that the "two consecutive quarters" is just snapshots of the monthly data at 3 month marks. They get revised over time. It's completely possible that data from Q2 will be revised upwards and there won't be two consecutive quarters of negative GPD in the future. The Q2 data has already been revised upwards once.
- zeroonetwothree 4y agoGDPNow has it at 2.9% even
- rjcjvyd77 4y agoThen we are out of recession? Find a new word for whatever you're describing because the rest of us are speaking the same language.
- pishpash 4y agoThat's too noisy given inflation is 6.6%.
- RC_ITR 4y agoReal GDP We've only recently seen nominal GDP declines in 2008 and 2020.
- pishpash 4y agoI know it's real GDP. I'm saying this number is noisier when inflation is high because you only ever measure nominal GDP and then deflate.
- RC_ITR 4y agoOk, let's play your game. How much of the first quarter decline was due to the ports clearing and imports rising? Here, I'll give you a hint (More than 100%): https://fred.stlouisfed.org/graph/fredgraph.png?g=UOxC https://fred.stlouisfed.org/graph/fredgraph.png?g=UOxC Do you think that's a real recession indicator? EDIT: Said differently, if our imports were at 4Q:21 levels, we'd have 0 quarters of decline. So is this the first import-driven recession? Because no other recessions have been like this.
- pishpash 4y agoDoesn't matter the reason, net net less goods were produced. Imports couldn't stay at 4Q:21 levels forever, only the timing of the imports was shifted around.
- RC_ITR 4y ago>Doesn't matter the reason, net net less goods were produced. That's not how GDP works? It's not adding up all the things that were made, it's measuring the value an economy produced. A quirk of that is imports are value an economy consumes (usually offset by Foreign Direct Investment). If those ships decided to bail from LA and head to Japan, would the economy have 'produced less'?
- pishpash 4y agoIsn't your whole point that goods were already paid for in one quarter but were held up until the next quarter to clear? If consumption and import were in the same quarter then it doesn't affect GDP at all in an accounting sense. But in your example, you get a +GDP in the quarter that consumption happened, making it seem like domestic production went up, then against that baseline you get a -GDP "due to" imports the next quarter, so you must "lose" the domestic production as a correction. If the ships bailed and stole your money or destroyed their goods I'm not sure if that still counts as imports or not.
- RC_ITR 4y ago
- RivieraKid 4y agoNo, it's not stricter. It's a rule of thumb, an approximation.
- roflyear 4y agoNo. It could also just be pointless. In isolation what does two quarters of negative growth mean? It obviously doesn't mean a bad economy, not always. The economy was awful plenty of times and GDP grew.