Recession? Yes, no, maybe……..

When I proposed to my wife, she was taken by surprise and responded: “Yes, no, maybe.”
I was reminded of that response while listening to all the conversations in recent days about whether or not the US already in, is about to be in, or will escape a recession.
A lot of the confusion relates to the question: “how do you define recession?” and “who gets to decide if it is a recession?”
And no, it’s not by Punxsutawney Phil looking for his shadow.

What is a recession?

The most common defintion of a recession is two consecutive quarters of negative GDP growth. I used this defintion in my Are we already in a Recession? published on June 18th. This week’s preliminary Q2 GDP number was -0.9% which, following a first quarter print of -1.6%, ticked the GDP box.

If only life were that simple.

Who gets to decide if it is a recession?
Officially, it is the National Bureau of Economic Research’s Business Cycle Dating Committee (I didn’t even know there was such a thing as cycle dating) that declares a recession. In its books, recession is “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.”
Yet the last recession declared by the NBER — for the period from March to April 2020, when the country was hit by the first wave of the COVID-19 pandemic — met only the first half of that definition. It was the shortest recession in U.S. history. Historically, recessions have lasted for 17 months on average.

When will we know if we are in a recession?
The NBER’s Business Cycle Dating Committee takes a cautious approach to its job. It has typically taken the committee four to 21 months to declare a recession. It didn’t declare the recession that began in April 2001 until July 2003.

Are we in a recession?
Fed Chair Powell: “I don’t think it’s likely that the U.S. economy’s in a recession now.”
National Economic Council Director Brian Deese on Thursday argued that although economic growth is slowing, the economy as a whole is showing “extraordinary resilience,” and pointed to the jobs the nation has added in the past year. “We are in a transition, there’s no doubt. The economy is slowing and that is what most expected when coming off of an extremely strong and fast recovery last year. But all of the indications that we see right now are for an economy that’s showing extraordinary resilience in the face of global challenges,
President Biden: “Coming off of last year’s historic economic growth — and regaining all the private sector jobs lost during the pandemic crisis — it’s no surprise that the economy is slowing down as the Federal Reserve acts to bring down inflation.”
“The odds are very high, perhaps over three quarters, that in the next year or two we will have a recession,” says Larry Summers, former Treasury Secretary.

So the answer is…… yes, no, maybe

And read these recent articles:

Economic commentary
Federal Reserve tries to rewrite history
Has Inflation Peaked?
Have Mortgage Rates peaked?
Are we already in a Recession?
Federal Reserve in Fantasyland: Implications for Housing Market
How far Behind the Curve is the Federal Reserve?
Will the Federal Reserve show chutzpah today?
Why are Mortgage Rates so high?

How to protect your house from title fraud
Florida Lawmakers Pass Insurance, Condo Reforms
Florida Regulator: Insurers Can Offer Roof Deductibles
Expansion Plans for Fort Myers Airport
Guide to Buying and Selling in Southwest Florida

May Market Summaries
Sales Resemble Pre-Pandemic — But Not Pricing & Inventory
Naples May Market Summary
Bonita Springs May Market Summary
Sanibel May Market Summary
Fort Myers Beach May Market Summary
Estero May Market Summary
St James City May Market Summary
Estero May Market Summary

  • Andrew Oliver, M.B.E., M.B.A.
    Real Estate Advisor
    m: 617.834.8205
    800 Laurel Oak Drive, Suite 400, Naples, FL 34108
    Licensed in Massachusetts

If you – or somebody you know – are considering buying or selling a home and have questions about the market and/or current home prices, please contact me on 617.834.8205 or