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Comment by autokad | Hacker News Reader

> It could well be that 50% of CEOs are always "considering" cutting jobs in the next 6 months

They are not. CEOs are generally optimistic. this is a very bad sign. 99.99999% of knowing what someone will do is what they say. people try to read way too much into other things, "what were they really thinking? how has that changed over time?" etc etc. sometimes you just have to snap out of it and LISTEN.

and what you hear is very bad, and far from 'useless'.

as far as whether we are heading into a recession or not, we are not. We are already in a recession. We've had 2 quarters of shrinking GDP. maybe we notch a positive quarter in between the next negative quarter, but its a recession. stop over thinking it.

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We haven't had any increase in unemployment yet, this isn't a recession.

Two periods of negative GDP growth without a rise in unemployment is unprecedented, but that is largely the result of bullwhip effects of the pandemic which was unprecedented.

The actual recession is going to be substantially worse.

The people who argue that we're in a recession right now due to two quarters of negative GDP growth while discounting the fact that every other indicator of the economy has been pretty healthy up until recently just makes me think "tell me you were too young to remember 2008/2001/1992/1982/1980 without telling me you were too young to remember".

IDK it is probably pointless to argue about this with people who will double-down on the strict definition that they think they know. Wait for another 12-24 months and let me know if it feels and order of magnitude worse or not.

(Agreed, though, that CEOs are generally almost naive optimists and that when they're all pessimistic about the economy it can almost become a self-fulfilling prophecy)

> We are already in a recession. We've had 2 quarters of shrinking GDP. maybe we notch a positive quarter in between the next negative quarter, but its a recession. stop over thinking it.

That definition of recession is not codified.

The official definition is that we’re in a recession only after an octogenarian declares it (retroactively of course).

as far as I know, a recession is codified as two consecutive quarters of negative growth

Recessions are defined by NBER, a consortium of academic economists.

Using the 2 quarters rule (something that has no official bearing) means that 2 of the last 3 recessions (2000 and 2020) weren't recessions.

covid did not result in 2 consecutive quarters of negative growth? that seems improbable

https://apps.bea.gov/iTable/index_nipa.cfm

Begin using the data > Section 1 Domestic Product and Income > Table 1.1.5 Gross Domestic Product > Modify > First year 2016 (refresh table)

It did: https://fred.stlouisfed.org/graph/?g=UtHh

Only two though-- Q2 was so sharp that everything after that was recovery.

Which points to why the whole "two consecutive quarters" rule is not, and should not be, definitive. The country could see a 50% collapse in a single quarter and see 2-3% growth each quarter for years, and not be in a recession by that definition.

It wouldn't be unusual for a major economic calamity to occur within a single quarter. Both Covid lock downs and the collapse of AIG/LB happened within a matter of weeks.

> The country could see a 50% collapse in a single quarter and see 2-3% growth each quarter for years, and not be in a recession by that definition.

But that's not receding, that's has receded.

If your implied definition is slipping below the growth trend, then any '50% collapse' is going to ensure 'recession' (by this definition) for probably (or even hopefully) a long time.

> But that's not receding, that's has receded.

A recession is past tense. One can speculate that we are in a recession, but it's not feasible to collect all the information necessary to make that determination in real time. The best one can do is say, "a recession started six months ago, and I think the situation is better/the same/worse."

Yes but 'has receded' is present perfect. My point was that the situation described was that of a time after a recession that had ended.

The reason the government defines the recession as 4 months is because we did not see two quarters of GDP decline as much as we saw 4 months of it.

Shift the quarter to begin in Feb and you'd only have 1Q of decline.

That is why the 2 quarters rule is stupid and why 2020 doesn't fit the rule.

It clearly does fit the rule because the year doesn't start in February. There's no need to change reality so you were right.

It's just a rule of thumb, not some profound maxim of economics.

The point is that if all the bad happened in half the quarter, that can make quite a difference, and the quarter start/end date is entirely arbitrary.

That said, you can apply the same to GP's suggestion of months, if the timescales are even shorter.

Yeah, the cutoff points for any rule of thumb are going to be fairly arbitrary. I don't understand why people are treating this like a profound observation.

The other alternative is we wait until a year from now for NBER to decide which amazingly would be after the Nov election.

How convenient!

Q1 and Q2 of 2020 had negative real GDP, so yes, 2020 was a recession. When they say back to back quarters of negative GDP does not mean a recession, what they really mean is not having back to back quarters of GDP does not mean its not a recession. as in 2001 when GDP shrank in Q1 and Q3 but not Q2.

Almost every situation in history of 1 0 1 is considered a recession but 2011, but that one wasn't considered one because Obama was president. however, every time that I know of, back to back shrinking quarters has always been a recession, as far as I know.

And it matches up, we all know its a recession now (except those who want to deny its one because of their political view). its a recession, you only look more wrong trying to deny the obvious.

The comment that you're replying to is poking fun at the way the biden administration responded to the report saying there were two consecutive quarters of negative economic growth. Everyone "knew" that a recession meant two quarters of negative growth, but we were told that actually it's only a recession if the people in charge say so. You do "trust the experts", right?

https://en.wikipedia.org/wiki/Wikipedia:Wikipedia_Signpost/2...

Yeah if republicans take the house and senate we will be in the deepest recession evarr. If not then we’ll only be in a mild correction.

We have had two quarters of negative growth before that were not called a recession.

You aren't wrong, but CEOs are also herd animals. Someone starts talking about a new initiative or a new idea, suddenly they are all talking about it to keep up with the Joneses. So when enough start talking about cuts or scaling back hiring, they all have to address it or they fear looking out of touch. Cuts can also help pad quarterly numbers, regardless of the real health of the company, so it can help those execs keep their job just a bit longer so long as it looks like they are demonstrating leadership.

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