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this post was submitted on 17 Oct 2023
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If I remember correctly, a recession did happen. It used to be defined as two quarters of negative GDP growth back to back, but yellen simply changed that definition.
You do remember correctly, but you (and most people) were always wrong. The two quarters thing was a rule of thumb, not an official designation. And Yellen didn't change it, that's just Republican/big business propaganda.
https://www.bea.gov/help/glossary/recession
We got close, but there never was a recession.
Okay, then someone should update the Wikipedia article, because that still says that it's two quarters with a 1,5% decline
Not really
It mentions it but gives it context. It then goes on to say
https://en.m.wikipedia.org/wiki/Recession
The NBER seems to have no fixed criteria for what a recession is. Not sure how reliably that reflects the economic reality of the majority of people then. Obviously criteria need to be adjusted over time, given changes in how economies work and what they even consist of.
Good thing I'm not an economist, because it sure feels like lower and middle class income households are being fleeced and destroyed with inflation and increased profit margins disguised as being part of inflation. I'd call the current economic situation a recession, but it isn't up to me after all.
Your take is correct and fair. Periods of high inflation are very damaging to everyday people if that inflation isn't uniformly applied, which it rarely is. "Recession" doesn't really accurately describe that situation and we don't have a good term for it.
Basically right now banks are making money, but both wall street and (most of) main street is losing out.
The problem is when there's inflation, prices are very elastic (they go up fast) but wages are more inelastic (they go up much more slowly). While ideally wages and prices should be equal, it doesn't work out that way in reality.
The subsection of main street that's in in-demand industries captures most of the wealth in this scenario. So extremely low wage earners are actually seeing some real wage growth, and so are some sectors of skilled workers, but most of the middle class is seeing their wealth go down.
Most of the wealthy who have all their money in stocks are also seeing their wealth stagnate.
The good news is, we're starting to see cracks in the dam. Since unemployment remains low, employers are being forced to raise wages now, especially given all the union action lately. I tentatively predict that as long as we're not pushed into an actual recession, living conditions will start to get better over the next few years for main street. That's why I'm saying go Powell go. Keep fucking wall street over. Put the screws to em. It will get better for us as long as unemployment stays low. Corporations have been using all the tricks they can to keep their profit margins despite the pressures on them, but they're running out of tricks. They'll have to eat into those margins soon.
I am an inflationary economist, and while BLS is working on income quintile inflation rates (and I think they're awesome and should be fully funded by Congress and published - but I digress), I don't know of any similar analysis for like...income quintile recession analysis. You'd be better off looking at the individual factors like unemployment and employment by quintile, inflation, and maybe income inequality measures. Recessions are defined after the fact and mostly for whole economy analysis, and like any higher level measure, often are very wrong when looking at an individual, but very correct in the aggregate.
Shrug Statistics.
Besides what others have mentioned, there was no drop in gdp.
https://fred.stlouisfed.org/graph/?g=1aimT
It was never defined as that. That’s been a colloquial marker for one but never a real definition.
And Yellen doesn’t have anything to do with defining a recession either. The NBER (national bureau of economic research) is the authority that declares recessions, and they only ever do it retroactively
The Covid 19 recession was declared despite only lasting 2 months.