The popular definition of an economic recession has traditionally been “two consecutive quarters of negative real gross domestic product (GDP) growth”, but economists at Bank of America’s Global Research team aren’t expecting an official ‘recession’ call anytime soon. They note that the National Bureau of Economic Research (NBER), which is the official arbiter of recessions, doesn’t use that “popular definition”. Instead, the NBER recession committee broadly defines a recession as a “significant decline in economic activity spreading across the economy, lasting more than a few months.” So, if it’s not strictly GDP, what other measurements does the NBER committee look at? BofA’s team shared six of the main variables the NBER uses in making its determination. And a casual glance explains why they’re not expecting the NBER to declare a recession anytime soon - all six measures are up since the start of the year! (Chart from BofA Global Research via Yahoo Finance)
Jeffrey Cerny