Recession may have already begun ‘end of last year’: Economist

The US economy could have entered into a range Recession Before the calendar turns to 2022.

“I wouldn’t be surprised if they did [the National Bureau of Economic Research] actually pushed the onset of the recession until the end of last year,” Vincent Reinhart, chief economist at Dreyfus Mellon, who spent Spent 24 years In various research roles at the Federal Reserve, on Yahoo Finance Live (video above). “So we may end up being in one of the longest downturns on record.”

The National Bureau of Economic Research (NBER) relies on Six primary data sources for making this official decision A recession, which the nonprofit private research organization defines as “a significant decline in economic activity that spreads throughout the economy and lasts more than a few months.”

Bureau of Economic Analysis (BEA), which is seen as an unofficial recession indicator, He said last week GDP for the second quarter fell 0.9% as consumers and businesses held back on their spending due to rising inflation. This marks the second consecutive quarter of economic contraction after the first quarter’s GDP decline of 1.6%. Two consecutive quarters of GDP is generally considered contraction.”Technical slack. “

Slacks ‘always chaotic’

Recent Earnings Warnings From popular retailers like Walmart and Target, lackluster consumer confidence readings and weak manufacturing data are adding fuel to the recession talk.

“There are plenty of reasons to believe the recession will not be as deep,” Reinhart said. “Recession cleanses excesses in the economy. We haven’t arranged many excesses. But it is always messy. We will learn something about someone’s balance sheet. We don’t know who it is. I don’t know what we are going to learn. But it won’t be fun. It happens every time.”

NBER has not announced that the US economy has achieved a level precise threshold To announce the official recession, and any Advertising In general it lags behind the stagnation experience.

The organization said: “The definition of the National Bureau of Economic Research confirms that a recession involves a significant decline in economic activity that spreads throughout the economy and lasts more than a few months.” His website. “In our interpretation of this definition, we treat the three criteria—depth, prevalence, and duration—as being more or less interchangeable. That is, while each criterion must be satisfied individually to some extent, the extreme conditions disclosed by a single criterion may partially compensate. Weaker indicators on the other hand.”

A character representing the Anaheim Ducks performs during a pre-game show before a game between the Ducks and the Vegas Golden Knights at the T-Mobile Arena on December 31, 2021 in Las Vegas, Nevada.  (Photo by Ethan Miller/Getty Images)

A character representing the Anaheim Ducks performs during a pre-game show before a game between the Ducks and the Vegas Golden Knights at the T-Mobile Arena on December 31, 2021 in Las Vegas, Nevada. (Photo by Ethan Miller/Getty Images)

Some of Reinhart’s street peers were not sold that these conditions had been met.

“For us, the main things we focus on are the continued strength in the job market,” global market strategist at JP Morgan Elise Osenbau He said on Yahoo Finance Live last week. “Looking at the components of GDP, the fact that consumers are still spending in real terms and things like credit card arrears remain at all-time lows is an encouraging sign that while the window is narrowing, we are not yet in that recession — kind The scenario we are watching is likely to happen.”

Brian Suzy It is a comprehensive editor and Announcer at Yahoo Finance. Follow Suzy on Twitter Tweet embed and on LinkedIn.

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