This is something that everyone who is actually interested in the topic will have heard of because it's been mentioned repeatedly by the experts. And yet this thread is filled with confident statements by people who clearly have put zero effort into forming their opinion. Sad.

It's funny when you read so many people on HN talk about others speaking outside of their areas of expertise when someone is talking about tech and then come to articles like this where a bunch of programmers try to sound like experts on the economy. Hubris is not in short supply.

* China is still purusing zero COVID.

* There's a land war in Europe with Russia effectively cut off from the Western world.

* German manufacturing, once a workhorse, is being crushed by energy costs

* much of the developing world is swimming hard against the current just to stay alive.

I don't think we are in a situation analogous to 1947, of course, and I do think we are in or at least heading into a more-than-technical recession. But "irrelevant because that only happens after once in a lifetime extremely disruptive events" is a pretty... odd... take in 2022.

And—relatedly—a once-in-ever declaration of a recession of less than one quarter, because of how uniquely sharp the decline in output, employment, and all the recession-relevant measures was, even though it quickly reversed direction due to stimulus and other policy responses.

So it's kind of weird people today pretending that the 2-consecutive-doen-quarter thing has always been an ironclad definition of a recession.

Hmm, maybe Germany can solve this the same way they "solved" ballooning Berliner rents: just pass a law saying how much energy should cost. Simple. They do love regulations over there.

Or just ask Gerhard Schröder and the rest of their former chancellors who were in bed with Russia, to blow their hot air through the pipes this winter. They have enough of it.

The comment you replied to gave evidence that directly contradicts the OP comment.

This Twitter thread has details:

https://twitter.com/bencasselman/status/1552411779040419841

The comparison between an economy transitioning from war footing and one transitioning from pandemic footing might be relevant.

So? The NBER business cycle dating work covers back into the 19th century, even if some of it was done retrospectively. If anything, the fact that it applied it's methodology this way to times when there could not possibly have been any policy impact to its decisions just further undermines the idea that exceptions to the 2-consecutive-down-quarter rule are about current political convenience.

> And 1947 marked the first year the US produced a quarterly GDP report.

NBER was doing income and product reports before the government did, the government actually directly was motivated by NBER’s prior work in starting to do them.

We're in an environment of very rapidly rising short-term interest rates, specifically as the Fed attempts to try to manage inflation; with back-to-back 75 bps increases. That tends to have a curve flattening effect as the yield curve is nominal; short term yields rise more than longer tenors if the market believes that inflation will decrease as real yields will be higher.

At least at some point, in order to bring a country out of the recession.

The two areas in which it does have a mandate are price stability and sustainable employment. Usually, recessions are accompanied by a loss of jobs, so that's where the Fed would intervene; that isn't happening thus far which is another reason why economists are split over what is really going on in the economy.

Not dramatically though, a more charitable view would say that employement levels are fairly flat.

Correct. And yet they let inflation get this bad, so it seems like they're trying to avoid recessions even though they haven't been told to.

https://www.federalreserve.gov/monetarypolicy/fomccalendars....

So, people are accepting fewer, apparently better employment offers, manufacturing is being onshored, but (due to lower supply of foreign slave labor and exploitable US workers) profits are down, and inflation is up.

Since unemplyoment is low, the Fed mandate seems pretty clear at this point. Interest rates should go up. The market will tank for a few years because inflation and paying workers screws with profits, then bounce back (in real terms) once corporate debt, etc unwinds, and productivity starts to rise again.

Rigid and weak corporations will be displaced by startups and existing companies that are able to adapt/innovate.

It's weird to me that Fox News's staunchly anti-China, pro-US manufacturing Fox News's viewership is so bent out of shape.

Aren't we experiencing exactly the effect Trump's tariffs were supposed to achieve?

In reality, there is a case for tariffs on China that has nothing to do with trade deficits. Biden can't just end them because it will make him look soft and let them off the hook for IP theft and other abuses. Really the president should not have this authority at all, Congress should be doing it.

Carter appointed Volcker and put America on chemotherapy. He caught blame for both inflation and de-leveraging withdrawal symptoms. Reagan got to take America off chemotherapy and take credit in the popular conscience for both reduced inflation and the re-leveraging boom. The political lesson: putting America on chemotherapy is important but politically somewhere between "thankless" and "suicidal."

When Powell was confirmed, it was with this context in mind. Politicians were thinking "do I want to be the next Carter"? I am worried that they only confirmed Powell because they thought he would not be the next Volcker. Of course, now that he has been confirmed for the next 4 years, he has some freedom to diverge from expectations. We'll see.

With today's federal debt level the fed is screwed: it cannot raise rates even close to inflation without busting the budget and cannot lower them (to fight a recession) without spiking inflation.

My bet is on long term rates-below-inflation period to deflate debts, similar to post-war period in the 1940s. And lots ofrhetoric. But it will be a painful ride.

Then everyone can run a balanced budget and watch their debt melt away.

The reason why we have price controls aka the zero lower bound of interest is that we would rather become eternal debt slaves (money supply has always been growing exponentially even under a gold standard) than face nominal losses that force us to face an umcomfortable truth that from this point onwards you will never earn anything again from owning abundant physical capital and that you will have to work for your own money instead of making others work for it.

I think the Fed knowing that history will try to kill it dead first time, because if they don't they know they'll likely have to go even higher with interest rates at the second attempt and the higher they're forced to go the more danger there will be to US financing operations as you say.

Recessions have weak employment (that's one of the most important factors NBER looks at to determine recession, among the key reasons they have declared two of the last three recessions without two consecutive down GDP quarters, and one of the key reasons the present two consecutive down GDP quarters is arguably not a recession.)

The Fed dual mandate relates to price stability and full employment (it doesn't independently consider recession per se.) It typically lowers rates in a recession to nudge back toward full employment.

Employment remaining strong and inflation remaining high, thought, it raises rates, even if some people think it may be a recession.

We’re not going to land on either extreme but I think it’s clear which is the preferred option.

[1] https://www.investopedia.com/terms/s/stagflation.asp

Can anyone enlighten us non-specialists as to how that particular contract works?

After all, this is a recession. Inflation is comically high - despite the incredibly massaged CPI number. The third and last criteria for stagflation is high unemployment, which it seems like we're heading into as soon as this last post-lockdown boom in consumer spending falls off a cliff.

Stagflation is very scary and it's going to be either the end of the USD, or further raising rates into a recession. Either way will produce untold suffering and cost hundreds of thousands of lives. And we're going full ESG and trying to make energy (and food) as expensive as possible. This is definitely a first and credit has to go to Western leaders because it really takes talent to self-destroy to this extent.

I think the question was, "How can I profit as things get worse?" Or, "What are good ways to protect myself as things go downhill?"

My recommendation? Reduce expenses. And think about investing in ways to reduce those expenses - Toilet paper is expensive, buying a bidet can save money after X uses. Meat can be expensive, see if a farmer in your area is willing to sell you the meat of a full cow at a discount for you to freeze and use over the course of X months.

Being temporarily underwater is fine, unless you think that economic growth will stop, or you are a day trader.

Dollar cost average if you can.

That's funny, I would recommend the exact opposite given the inflationary situation.

I would accelerate buying durable objects that you would like to have eventually, instead of waiting.

Saving money beyond a safety buffer is a bad idea when cash is losing 10% of its value per year and stocks are going down.

Not "to some", two back-to-back negative GDP stats has been the definition of a recession for my entire life. Now suddenly it's questionable, because the current administration would like to shrug away its failures, and too many in the media are helping them do it.

This ad-hoc re-definition of language to suit political purposes is scary and Orwellian.

> Now suddenly it's questionable, because the current administration would like to shrug away its failures, and too many in the media are helping them do it.

Whether or not I agree with the assessment of the current administration wanting to "shrug away its failures" has nothing to do with it. The parent comment was clearly arguing the theory, which is total bullshit on its face, that the reason it hasn't been officially designated a recession is because the administration doesn't want it to. The reason this theory is total bullshit is because it's pretty obvious the administration has no control over how the NBER marks recessions.

I think it's fair to designate theories which are total bullshit on their faces as "conspiracy theories".

So we use the usual rule of thumb to claim it's a recession when it's a good thing, but instead try claim it's not a recession until a given think-tank says so when it's a bad thing.

If there is some desire to obfuscate what is actually going on in "the media", well, the media is doing a pretty shitty job of obfuscating it. All the major news outlets have the GDP report as top news stories on their sites. Some easy "liberal media" examples:

1. NYTimes: "G.D.P. Report Shows a Drop, Fanning Fears of a U.S. Recession - A key measure of economic output fell for the second straight quarter, raising fears that the United States could be entering a recession."

2. WaPo: "What causes a recession? The dominoes leading toward a new recession have started falling, so what happens next? There are two scenarios that could play out." And also "U.S. economy shrinks again in 2nd quarter, reviving recession fears", and perhaps very relevant to this discussion, "The 8 economists who decide if the U.S. is in a recession"

So the major news outlets are accurately (and loudly) reporting what is going on. I know in my lifetime it has pretty much always been argued that the official "start and end dates" of recessions are marked after the fact (e.g. I recall clearly the start date for the Great Recession was pushed earlier by the NBER after their research had concluded). But these news outlets certainly aren't hiding anything, nor even trying to dissemble - they're just reporting things as the current facts show.

But then some conspiracy theorists (and yes, I believe that term totally applies) are trying to argue that because news outlets aren't saying "we are officially in a recession" that it is "Orwellian".

The constant whining by Trump and his supporters over "the media is so mean to me" has long since passed Chicken Little proportions.

This literally invented false historical facts (about the historical official definition of a recession) to support a claim of a political conspiracy (of the media doing Orwellian thought manipulation through language redefinition to support a favored political faction.)

There is quite a trend toward calling things conspiracy theories these days, but there are more conspiracy theories being spread these days.

I think is is probably due to the well-documented conspiracies between the conservative (and some of the radical liberal) press and foreign propagandists to spread misinformation in the US, and conspiracy theories are an effective way to achieve that goal.

If Trump was still president, the media would most definitely be calling this a recession. And they would be correct in doing so.

Because the other indicators they look at (employment, consumption etc.) have been consistent with recession in those cases. They've also called recessions without two consecutive down quarters (either with an up quarter in between, or most recently with a single down quarter), because the other indicators were strongly indicating recession. Right now jobs are up.

Employment is strong, consumption is strong, the 1Q drop (not sure about 2Q because I haven't seeb details yet) was associated with a jump in imports as consumer purchases of imported goods shot up.

Honestly, there's probably a problem with the entire concept of “recession” as a binary label, but the same multidimensional set of factors that has allowed multiple recessions to be determined without two consecutive down quarters supports non-recession with two consecutive down quarters.

No, it hasn't, and two of the last three NBER-identified recessions have not met that definition. It has always been multidimensional, it's just that historically the other factors have always [0] pointed toward recession with two down quarters, and sometimes also without. Having strong employment, etc., despite two down quarters in GDP is a historical aberration.

[0] EDIT: as another poster notes, not always—the 1947 non-recession being an example

But wait, according to the mainstream media now, we shouldn't listen to the NBER either, they're all just a bunch of "white economists":

https://www.cnn.com/2022/06/30/economy/recession-economists-...

Is this a joke? It's like something you'd overhear at brunch from a group of co-eds

As a thought exercise, would you think it's not notable if the 8 person board was entirely female .. or entirely black?

It’s shocking that you somehow think race or gender can effect the categorization by economists of economic conditions. It’s fairly quantitative situation and I’m at a loss how different backgrounds would effect that analysis.

Everything else is, so why not?

CNN in January 2020: "Coronavirus task force another example of Trump administration's lack of diversity" <https://www.cnn.com/2020/01/30/politics/donald-trump-coronav...>

The title I get is the same minus the "white". I wonder if it's A/B testing.

I took a screenshot as I had a hunch it would be changed once enough people saw it.

Edit: shows up without the “White” also for me now:

https://imgur.com/a/84X6RKj

> Who decides if the US is in a recession. Eight White economists you've never heard of.

https://www.theguardian.com/media/2022/jul/04/fox-oan-newsma... https://www.cnn.com/2022/04/29/politics/hannity-text-message... https://nymag.com/intelligencer/2021/08/tucker-carlson-has-s...

https://adfontesmedia.com/wp-content/uploads/2022/01/Media-B...

Like other commenter said, AP and Reuters are best at being center / neutral for now.

How is more people working for less pay a counterargument against recession.?

https://fred.stlouisfed.org/graph/fredgraph.png?g=Sfun

So, that sucks, but it doesn't make a useful definition of recession. This is the result of massive, global macroeconomic forces. It's basically a slow reset of the post-WWII global order.

>All things being equal, more people working is a an increase in buying power.

This isnt an absolute. If you have 1 person working for $1/day and go to 2 people for $0.5/day, buying power hasn't changed.

You can have more people working, and people working longer, for less and less material goods.

I think any meaningful definition of economic growth/recession must address the fundamental question of is there more material goods and wellbeing in a country today than yesterday.

I agree that the allocation of those goods is a separate question entirely.

>This is the result of massive, global macroeconomic forces. It's basically a slow reset of the post-WWII global order.

I think that what we are seeing is the start of a realization that part of historic GDP growth was actually a fiction, in that more tangible goods were not produced.

This is why a small increase in wages sent inflation through the roof.

In theory, US real GDP per capita has gone up 33% since 2000[1]. This looks fine on paper as long as the growth is just accumulating in a bank account. Once people actually try to consume more, it becomes obvious that there isn't 33% more stuff to buy.

(Hint: newspeak was not adding more to the language, was not based on real usage, and was not influenced by public petitions).

Or is this you redefining "Orwellian" and I've missed the joke?

But are we trending toward a Brave New World rather than Oceania?

I mean, if we just take Wikipedia as a gauge, they have defined it according to the NBER, dating back to 2008 [1].

  A recession is 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.

[1] https://www.nber.org/news/business-cycle-dating-committee-an...

[2] https://en.wikipedia.org/w/index.php?title=Recession&diff=pr...

[3] https://en.wikipedia.org/wiki/Talk:Recession

[4] https://twitter.com/RepublicanStudy/status/15516279756401909...

From the Oxford dictionary (recession): a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

It's only now that we're seeing all this slimy lawyering about the definition of recession. "Well acksually, technically..."

I don't have the time to link the other stats, but they're not so rosy either, except employment. One good stat and several bad ones is still a recession.

So it seems safe to say that real earnings are indeed decreasing, rather than regressing to some past mean.