Humanities desk
< March 25	<< Feb \| March \| Apr >>	March 27 >

Welcome to the Wikipedia Humanities Reference Desk Archives
The page you are currently viewing is a transcluded archive page. While you can leave answers for any questions shown below, please ask new questions on one of the current reference desk pages.

March 26[edit]

USA: Drawing the line of a recession.[edit]

Is there a line drawn? Are we for example, half-way into a recession? 80% into a recession? And I believe during the 2008 recession, we did not know we were in a recession until 2009, do you think if we do hit a recession, we would essentially be a lot quicker to know we are in 1? 2601:249:8200:A640:C995:AE2C:6C25:CBE6 (talk) 02:38, 26 March 2023 (UTC).[reply]

Determining whether "we" (the USA?) are half-way, 80%, or 5% into a recession requires gazing into a crystal ball, and we do not answer requests for predictions. The definition of "recession" is, moreover, quite vague; at what level does a visible decline in economic activity become "significant" and how long is "more than a few months"? Some economists will call a decline a recession while others are adamant it did not rise (or sink) to that level. There may be some correlation with the political alignment of a pundit with the administration in the White House. Since we do not answer requests for opinions and debate either, I'm afraid you'll have to decide for yourself. The wisest is to wait until economic activity picks up again, and then classify the slump with the benefit of hindsight. --Lambiam 13:11, 26 March 2023 (UTC)[reply]

There's an old saying that recession is when you're out of work, and depression is when I'M out of work. Given the low unemployment rate at present, that does not appear to be a current indicator. ←Baseball Bugs ^{What's up, Doc?} carrots→ 15:56, 26 March 2023 (UTC)[reply]

When there is a sudden decline in the size of the work force, as occurred in the COVID-19 pandemic in many countries, companies that cannot hire the people they need are forced to reduce their activities. This may have a snowballing effect: other companies may have sufficient personnel but cannot get their hands on sufficient materials for the production needed to meet demand. Overall, we'll then see a decline in economic activity. But at the same time the demand for workers is higher than the supply, so unemployment is low. I'm not saying that this is what we are seeing now, but economic stagnation and decline can in principle co-occur with a low unemployment rate; the two may have a common underlying cause. --Lambiam 22:54, 26 March 2023 (UTC)[reply]

From es:Recesión:

La opinión emitida por Julius Shiskin en un artículo publicado el 28 de agosto de 1975 en el diario New York Times en torno a dos trimestres consecutivos de caída como plazo definitorio para el término. 2

The NYT article says:

On the basis of a study of past recessions, Mr. Shiskin concludes that a current decline in aggregate economic activity would qualify as a recession if:

¶In terms of duration it lasts 9 months or longer as measured by a decline in nonfarm employment.

¶In terms of depth it includes a decline of at least 1.5 per cent in real gross national product that extends over at least two quarters (six months), and a rise in the unemployment rate of more than two points and to a level above 6 per cent.

¶In terms of diffusion; more than 75 per cent of all industries sustain declines in employment lasting six months or longer.

[...]

Mr. Shiskin notes that the simple two‐quarter‐decline‐in‐G.N.P. definition has some loopholes, but nonetheless has yielded about the same results in naming recessions as the more elaborate techniques of the National Bureau of Economic Research.

I have heard that the "technical definition" of recession is at leas two quarters of decline. I see that it is not so accepted actually. --Error (talk) 16:01, 27 March 2023 (UTC)[reply]

Well, I'm also hearing now the recession can be extremely short and controlled. All we have to do is wait for more layoffs, after the tech companies finish the layoffs. Then, when the unemployment surge, all the Fed Reserve has to do is pivot, or reverse interest rates, then everything goes back to normal. But then I'm scratching my head, wouldn't inflation go right back up? 2601:249:8200:A640:6192:535F:DD86:406C (talk) 23:12, 29 March 2023 (UTC).[reply]