I’ve Seen Enough, the US is in Recession Now, Q&A on Why – Mish Talk

Recession Q&A

Q: Doesn’t it take two consecutive quarters of negative GDP to start a recession?
A: The NBER, the official arbiter of GDP, has no such requirement. Instead it looks at a variety of conditions. 

The Pandemic recession did not even have a full quarter of negative GDP. It had two months of recession. 

Two consecutive quarters of declining real final sales (not just declining GDP), is a sufficient condition but not a necessary one. A decent slump in Q1, a small rebound in Q2, and a bigger slump in Q3 would likely mark the start of recession in that first quarter, not the third. 

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