February 20 20 peak in economic activity, the committee concluded that the subsequent drop in activity had been so great and so widely diffused throughout the economy that, even if it proved to be quite deep, the downturn should be classified as a recession. So basically what they're saying here is that it's not just about two consecutive quarters of economic decline in growth, for example. But it can be about a number of indicators and in fact, those indicators going down very aggressively could mean that even if they only were down for a little while, the NBER might ultimately categorize that as a recession. The definition goes on. Because a recession must influence the economy broadly and not be confined to one sector. The committee emphasizes economy wide measures of economic activity. The determination of the months of peaks and troughs is based on a range of monthly measures of aggregate real economic activity published by the federal statistical agencies. These include real personal income less transfers, non farm payroll employment, employment is measured by the household survey, real personal consumption expenditures, wholesale retail sales adjusted for price changes and industrial production. There is no fixed rule about what measures contribute information to the process or how they are weighed in our decisions. In recent decades, the two measures we have put the most weight on are real personal income, less transfers, and non farm payroll employment. So this will obviously be significant as we talk about whether there can be a recession in the context of what seems like a strong labor market. The NBER is basically saying that non farm payroll employment has been a key factor in how they determine recessions, which means that they might be on the side of there isn't a procession right now. But here's the real key. Quote, the committee's approach to determining the dates of turning points is retrospective. In making its peak and trough announcements, it waits until sufficient data are available to avoid the need for major revisions to the business cycle chronology. In determining the date of a peak in activity it waits until it is confident that a recession has occurred. In other words, the NBER is never going to call a recession as it's happening. It views its job as entirely retrospective. It's basically like the time keepers in Loki and effectively useless for the day to today discussion, which might be why people are so much more focused on the traditional two quarters of declining GDP definition. But really, the question is, why does this all matter? I can't tell right now if the obsession about whether we're in a recession or not is strictly a media obsession. In other words, it's something that is important to different media outlets from a narrative and framing and attention gathering perspective. Or whether there is an element of a skeptical populace trying to catch the media or authorities in what they perceive as a lie or intentional obfuscation. In other words, is this discussion being driven just by media who are looking for the next narrative, or is it also being driven by people whose worldview revolves around the assumption of authorities lying to them, and that when politicians or the mainstream media say we're not in a recession, or worse, use this sort of tortured language like The Wall Street Journal did when it said a common definition of recession, they're sure then that whatever the mainstream media or politicians are saying, the opposite must be true. I think this forms a sort of interesting Rorschach test for the state of economic and political discourse. According to a June 16th economist in YouGov poll, 56% of respondents believe that we are going through a recession. Only 22% disagreed in 22% said they weren't sure. Now among those respondents 70 percent of Republicans said the U.S. is in a recession, 56% of independence said we're in a recession and 45% of Democrats said we're in a recession. Crypto trader chubby Korn says kind of feels like they're trying to convince us the car isn't broken down while they're pushing it. I don't know if they're going to be able to hold the facade together until 2024. And I think that tweet gets to the point that recession at this point is sort of just shorthand for economic pain, which it could be argued is more relevant from people's lived perspectives than those technical definitions. There is definitely, however, an undercurrent of animosity and a sense of being lied to or manipulated that has spread all over this discourse on Twitter. David sacks with 9000 likes and counting on this one writes, a lot of people are wondering about the definition of recession. A recession is defined as two consecutive quarters of negative GDP growth if a Republican is president, the definition is far more complicated and unknowable if a Democrat is president. Conan O'Brien tweets The White House now says it's only a recession if you see a salamander wearing a top hat. Zero hedge writes all of the economists who one year ago promised inflation was transitory agree. This is not a recession. Sven Henrik writes weird how two consecutive quarter declines in GDP was a recession each time except this time, and Charlie biello builds on that and says the last ten times the U.S. had two or more consecutive quarters of negative real GDP growth, the economy was in a recession. You have to go back to 1947 to find an exception. WSB chairman writes our government told us inflation was transitory and under control. Now they are changing the definition of a recession so they can tell us we aren't in one. The American people are being gaslighted. Liquidity writes a fake quote from The White House. Well, if you look at the GDP growth on a pro forma adjusted last two week annualized rate run basis, the economy is certainly not in a recession.