Genuine question: At what point do we actually declare that we are in recession. Do we wait for GDP figures out these signs are enough to assume we are in bear markets now.
Recession is a loosely defined economic term where the exact definition depends on who's reporting it, traditionally, it's meant 2 quarters of decline in GDP growth. But now:
The NBER defines a recession as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales
But recession is a macroeconomic term that may not reflect the actual impact on consumers -- conusumers could be suffering through an economic downturn that's not technically a "recession".
Yeah, recession start and ends can only really be determined accurately in retrospect. And like you said it's marked by the decline meaning it starts when growth hits its high point and ends when it hits a low point. In terms "feeling" like a recession, it'll be more like midway through the descent until midway into a recovery. A stock market crash is frequently a leading indicator of a GDP recession though not always. We could be seeing the early signs of recession for the past six months, but we won't really know for a while.
Some crypto collapsing does not mean it is a recession. The exploding prices for real goods and less and less people being able to afford basic things are the indicator for that.
Real GDP has to shrink for it to be a recession. GDP in the United States is currently growing strongly. The Conference Board is not predicting a recession in the U.S. in 2022, and they just updated their forecasts a few days ago.
Sure. And if GDP goes negative, and if employment falls etc etc then people will start saying recession. I was just trying to answer the GPs question, not predict whether or not this is a recession!
By the way the official declaration by the U.S. bureaucracies of the onset of a recession typically lags the actual onset by a year or so.
When growth actually slows. The stock market has little to do with whether we are in a recession. If it fell by 10K points tomorrow, most stocks would still be wildly overvalued.
The NBER defines a recession as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales
https://www.investopedia.com/terms/r/recession.asp
But recession is a macroeconomic term that may not reflect the actual impact on consumers -- conusumers could be suffering through an economic downturn that's not technically a "recession".