United States | The department of economic terminology

Even if GDP shrinks, America may officially avoid a downturn. For now

Now you see recession, now you don’t

Contractors stand on the roof of a house under construction at the Norton Commons subdivision in Louisville, Kentucky, US, on Friday, July 1, 2022. With fewer buyers competing, the number of active US listings jumped 18.7% in June from a year earlier, the largest annual increase in data going back to 2017, Realtor.com said in a report. Photographer: Luke Sharrett/Bloomberg via Getty Images

Jul 14th 2022|Washington, DC

Everyone knows that recessions are painful. But what exactly are they? It is an abstruse but important question that may crop up in the coming weeks in America because of the oddly lopsided state of its economy. The popular definition of recessions, often cited by journalists, is two consecutive quarters of negative growth. On that basis America finds itself on the brink of one today. In the first quarter of 2022 the economy shrunk slightly. Some indicators, such as declines in homebuilding and in factory output, suggest that a mild contraction might also have occurred in the second quarter. If that is the case when gdp is reported on July 28th, the conclusion would seem to be straightforward: America is in recession.

This article appeared in the United States section of the print edition under the headline “Recession-spotting”