Recession Referees Reject Idea That Two GDP Drops Spell a Downturn

The official arbiters of US recessions aren’t close to making a call that a downturn is under way, and may end up concluding 2022’s first half was part of a continuing expansion.

The National Bureau of Economic Research’s business cycle dating committee rejects the notion that two quarterly contractions in gross domestic product is conclusive of a recession. Instead, the group of eight elite academic economists looks at half a dozen monthly economic reports to see a “significant decline in economic activity that is spread across the economy and that lasts more than a few months.”

The committee doesn’t believe in “the two-quarter-declining GDP rule,” NBER President and Chief Executive Officer James Poterba said via email. That was after data Thursday showed gross domestic product fell at a 0.9% annualized rate in the second quarter after a 1.6% drop in the first three months of the year. He declined to comment on the current economy.