Today, the U.S. Bureau of Economic Analysis announced that in the second quarter of 2022, real Gross Domestic Product (GDP) declined by 0.9%. That marks two consecutive quarters of negative growth, a barometer of economic health that economists typically use to define a recession.
The Georgia Center for Opportunity’s (GCO) take:
“It’s now official. We’re having stagflation.
There has never been a time when the Business Cycle Dating Committee did not declare a recession when real GDP declined for two consecutive quarters since the availability of quarterly GDP data,” said Erik Randolph, GCO’s director of research. “In fact, the opposite is true. There have been two times, since the availability of the data, without two consecutive real GDP declines when the Committee declared them to be recessions. This happened with their declared 1960 and 2001 recessions. Who knows if and when the NBER Committee will declare whether we’re already in a recession, and for how long. But if it doesn’t declare so despite the real GDP data, it would be unprecedented and require a good explanation. In the meantime, GDP gives perhaps the broadest measure of economic activity, giving a strong signal that we’re in a recession until such time economists work out their various methodologies to affirm or deny.”