The housing and labor markets may be doing well, but recent US government data tell a different story, as the economy’s gross domestic product has fallen for two consecutive quarters.
This could eventually lead the National Bureau of Economic Research to declare a recession, but a few other factors need to be properly resolved before that happens.
Pedro Amaral, an associate professor of economics at California State University Fullerton, discusses what a real recession is and whether the economy is facing yet another recession, according to experts.
Amaral says: “Part of the argument is semantic, and the common definition of a recession consists of two consecutive quarters of negative real inflation-adjusted GDP growth that the U.S. economy has experienced in the past two quarters. On the one hand, it stems from the fact that it is a more accepted definition, depending on the opinion of the NBER’s Business Cycle Dating Committee.”
“In addition to GDP growth, the Commission will consider a broader set of factors, including data on personal income, employment, consumer spending, wholesale and retail sales, and industrial production.”
“If you have to bet, I think the NBER will eventually declare a recession. , if it doesn’t respond to rate hikes, interest rates could rise further, deepening recession and triggering stagflation.