Which points to why the whole "two consecutive quarters" rule is not, and should not be, definitive. The country could see a 50% collapse in a single quarter and see 2-3% growth each quarter for years, and not be in a recession by that definition.

It wouldn't be unusual for a major economic calamity to occur within a single quarter. Both Covid lock downs and the collapse of AIG/LB happened within a matter of weeks.

> The country could see a 50% collapse in a single quarter and see 2-3% growth each quarter for years, and not be in a recession by that definition.

But that's not receding, that's has receded.

If your implied definition is slipping below the growth trend, then any '50% collapse' is going to ensure 'recession' (by this definition) for probably (or even hopefully) a long time.

> But that's not receding, that's has receded.

A recession is past tense. One can speculate that we are in a recession, but it's not feasible to collect all the information necessary to make that determination in real time. The best one can do is say, "a recession started six months ago, and I think the situation is better/the same/worse."

Yes but 'has receded' is present perfect. My point was that the situation described was that of a time after a recession that had ended.

The reason the government defines the recession as 4 months is because we did not see two quarters of GDP decline as much as we saw 4 months of it.

Shift the quarter to begin in Feb and you'd only have 1Q of decline.

That is why the 2 quarters rule is stupid and why 2020 doesn't fit the rule.

It clearly does fit the rule because the year doesn't start in February. There's no need to change reality so you were right.

It's just a rule of thumb, not some profound maxim of economics.

The point is that if all the bad happened in half the quarter, that can make quite a difference, and the quarter start/end date is entirely arbitrary.

That said, you can apply the same to GP's suggestion of months, if the timescales are even shorter.

Yeah, the cutoff points for any rule of thumb are going to be fairly arbitrary. I don't understand why people are treating this like a profound observation.