Recession Added 528,000 Jobs in July
cnbc.com
cnbc.com
Stock market likely to see it negative due to possible continued rate hike by the FED. Also...Needs further investigation.
A Recession could cause persons not likely to look for jobs, like for example a recent mother who decided to focus on raising kids, or a student, to look for a job. Maybe inflation would cause the household to not cope with bills anymore, if just one member of the household has a job.
Additionaly wages seem to be a lot higher than they've been for a long time for what was previously low wage work.
As an extreme example, suppose all farmers were unpaid slaves. Slavery gets outlawed, and farmers now get paid. Food prices rise dramatically, resulting in massive inflation overall (and thus a fall in real wages for everyone except farmers).
https://tradingeconomics.com/united-states/labor-force-parti...
Notably the rate for the under 50 crowd is up substantially, it's the retirees bringing the rate down.
I got fired at the end of 2019 and was thinking about retiring. Covid made it an easy decision to take another job, I was going to be sitting at home in front of a computer for a year or two anyway.
For near retirees who had to go to work in person, it made much more sense to retire rather than to risk death in order to put a few more years worth of money in the 401k.
Yet another contributor to high inflation, which is a product of many factors, some good (e.g. less wage inequality) and some bad (e.g. supply chain shortages, energy prices, excess government stimulus).
That's like saying "Your physical health is defined by your BMI, case closed."
NBER has published work going back 40 years that demonstrates why a simplistic measurement of contraction duration is flawed.[1] Just like your physical health, economic health should really be measured holistically across different aspects.
[1] https://www.nber.org/books-and-chapters/business-cycles-infl...
If an insurance company uses BMI to determine your physical health, then yes, it is case closed. It doesn't matter how unrealistic it is, it doesn't matter what any research has shown. It is based on a strict definition set by the insurance company that defined how it is calculated.
If a different company wants to use a different approach, then they're free to do so, no one is forced to use BMI to calculate their health.
However, if we want to determine if a country is in recession by comparing to a specific country's definition of recession, which is what the OP just did, then the case is closed (by that definition).
> Just like your physical health, economic health should really be measured holistically across different aspects.
Unfortunately, the world and people that live in it doesn't work like this. A lot of people like simple calculations even if it is wrong, outdated or not realistic.
It's easier for people to say recession is determined by two quarters of two consecutive quarters of negative GDP growth. A few countries use this as mentioned by the OP.
It is case closed by this specific _strict definition_ of what a recession is.
From a rules-lawyering perspective, this is true. But I believe the true intent of determining if a country is in a recession or not is not about semantic gamesmanship, but about how accurately we can represent reality because the fidelity of that representation is what drives policy. That fidelity is what matters in terms of "correctness". If I say the official definition changes to whether or not a groundhog sees his shadow on a particular day, that's probably not the best way to represent economic health as a means of crafting policy even if it's "official" by fiat.
Let's not miss the forest for the trees. Policy is what matters because it's what ultimately impacts peoples lives.
No, it's like saying "Your BMI is defined by the following formula, case closed". This is treated as a technical term by economists, with an actual definition. But it also has a more ambiguous colloquial use. Personally, I think the media should use a more quaint, wishy-washy term like "slowdown" and leave "recession" to the economists to define as two consecutive quarters of negative GDP growth.
>NBER has published work going back 40 years that demonstrates why a simplistic measurement of contraction duration is flawed.[1] Just like your physical health, economic health should really be measured holistically across different aspects.
Or yeah sure, call it "economic health". Even better, throw a "holistic" in there and it will forever remain in the realm of the squishy soft sciences.
Economic health was my term to point out where people get wrapped around the semantic axle and miss what's actually important.
>This is treated as a technical term by economists, with an actual definition.
To your point, NBER has their definition of "recession" that uses a myriad of metrics beyond just "GDP-growth-over-two-successive-quarters". From my perspective, that "holistic" measure is likely more accurate. Like it or not, economics is more social science than hard science.
If recession isn't indicative of economic health, why do we bother to measure it in the first place? Put differently, if it's not a measure of economic health, why does the definition even matter?
"Payrolls increased 528,000 in July, much better than expected in a sign of strength for jobs market"