Are We in a Recession?

Short answer: no.

The reason is that GDP is growing, according to numbers released this morning. It grew 0.6% last quarter. A recession is defined as two consecutive quarters of declining GDP.

Now, 0.6% is certainly slower than we’d like to see. It may even be revised downward in the coming weeks. We all know the economy is not in ideal health right now.

But a recession? Not according to the definition economists have exclusively used for decades.

That doesn’t make for very exciting news. But there’s an easy way around that: just make up a new definition for “recession.” Make it mean anything you want it to.

Josh Bivens of the Economic Policy Institute did just that. What he told CNN certainly sounds more exciting than the bland truth:

“Despite the barely-positive growth, we are almost certainly in a recession. There’s nothing magical about staying above zero.”

Bivens might as well be a character in Alice in Wonderland:

‘When I use a word,’ Humpty Dumpty said, in a rather scornful tone,’ it means just what I choose it to mean, neither more nor less.’

It is important that when we use a word like recession, we all mean the same thing. Confusing people by introducing multiple definitions doesn’t do anybody any good. Well, except maybe for reporters and press-hungry pundits.

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