Recession?

Orphia Nay · 13th July 2022, 07:53 PM

Will we have a global recession? Several local recessions?

Thought it was worth a thread.

Wikipedia while I'm here:

"In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock, the bursting of an economic bubble, or a large-scale anthropogenic or natural disaster (e.g. a pandemic). In the United States, it is defined as "a significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales". In the United Kingdom, it is defined as a negative economic growth for two consecutive quarters.

"Governments usually respond to recessions by adopting expansionary macroeconomic policies, such as increasing money supply or increasing government spending and decreasing taxation."

https://en.wikipedia.org/wiki/Recession?wprov=sfti1

psionl0 · 13th July 2022, 09:58 PM

Originally Posted by Orphia Nay

Will we have a global recession? Several local recessions?

We appear to be experiencing the opposite problem ATM - inflation caused by global market shortages - especially labour.

Central banks are trying to do the opposite of recessionary measures. They are trying to restrict the money supply by jacking up interest rates.

Of course, things could change on a button considering the corona virus pandemic and the Ukranian war.

Puppycow · 14th July 2022, 09:09 PM

Originally Posted by Orphia Nay

Will we have a global recession? Several local recessions?

Probably. Certainly a slowdown, at least.

The world's second-largest economy:

China’s GDP growth misses expectations in the second quarter

Quote:

China eked out GDP growth of 0.4% in the second quarter from a year ago, missing expectations as the economy struggled to shake off the impact of Covid controls. Analysts polled by Reuters had forecast growth of 1% in the second quarter.

USA:
Bank of America slashes S&P 500 target to ‘lowest on the Street’ after recession forecast

Quote:

Bank of America has lowered its 2022 target for the S&P 500 by 900 points, to 3,600, citing its forecast for a recession this year and expectations for a Federal Reserve “pivot” in 2023.

The new year-end target is “the lowest on the Street,” said equity and quant strategists at Bank of America in a BofA Global Research report Thursday. BofA now forecasts a “mild” U.S. recession starting in the second half of 2022, they said.

Right now the Fed is more concerned with squashing inflation. They may need to cause a recession to achieve that.

Brainster · 17th July 2022, 07:10 PM

The US is likely to have a mild-moderate recession,like the rest of Europe and Japan. Countries in the second and third world may see food riots, like those happening in Sri Lanka.

The Atheist · 27th July 2022, 07:38 PM

Originally Posted by Orphia Nay

Will we have a global recession?

Yes.

https://www.bbc.com/news/business-62310354

From what I can see, I think USA, NZ, UK, Italy and several other countries are currently in a recession, with this being the second quarter of contraction.

Does it matter? That's the question, and I think the answer to that is probably yes as well.

People are already deciding not to eat so they can feed their kids, so if things don't improve quickly I think we'll see some very negative results.

Governments are pretty powerless, with infrastructure spending not on the table because the resources to do the work isn't there.

We need a reduction in energy prices toot-sweet, and I don't see that happening.

Brainster · 28th July 2022, 10:47 AM

Two consecutive quarters of negative GDP growth in the US. Of course the media is quick to remind us that while that is considered the classic definition of a recession, technically it has to be announced by the wonks at the NBER, which almost certainly means there will be no announcement until after the midterms.

wareyin · 28th July 2022, 11:01 AM

Originally Posted by Brainster

Two consecutive quarters of negative GDP growth in the US. Of course the media is quick to remind us that while that is considered the classic definition of a recession, technically it has to be announced by the wonks at the NBER, which almost certainly means there will be no announcement until after the midterms.

I'm sure that you can find this "classic definition" written down somewhere, right? But that certainly doesn't matter because a non-partisan organization is definitely in the tank for the Dems!

Startz · 28th July 2022, 03:48 PM

For those curious, the NBER declared a 2 month long recession for Spring 2020...somewhat over a year after the end of that recession.

Brainster · 5th August 2022, 09:12 AM

Granted, unemployment and job gains are a lagging indicator, but seriously, 528,000 new jobs and an unemployment rate of about 3.5%? This is definitely a Jekyll/Hyde economy. Of course the jobs report could put more pressure on the Fed to raise rates again. The key will be the inflation numbers next week. I will say anecdotally that I have seen price declines on some of the food products I buy regularly; not to pre-2021 levels, but noticeable, and of course gasoline is the same. So they might get some break there but maybe not, since CPI-U excludes the volatile food and energy components.

Puppycow · 5th August 2022, 10:16 AM

Funny how good news is bad for stocks:

Stocks fall after strong July jobs report points to more Fed action

Quote:

Stocks fell Friday in a volatile trading session after the July jobs report was much better than expected, as investors assessed what a strong labor market would mean for the Federal Reserve’s rate tightening campaign.
. . .

The labor market added 528,000 jobs in July, easily beating a Dow Jones estimate of a 258,000 increase. The unemployment rate ticked down to 3.5%, below the 3.6% estimate. Wage growth also rose more than estimated, up 0.5% for the month and 5.2% higher than a year ago, signaling that high inflation is likely still a problem.

TragicMonkey · 5th August 2022, 11:32 AM

It's almost as if economies are too complex to easily attribute effects to particular immediate causes.

theprestige · 5th August 2022, 12:39 PM

Originally Posted by Brainster

Two consecutive quarters of negative GDP growth in the US. Of course the media is quick to remind us that while that is considered the classic definition of a recession, technically it has to be announced by the wonks at the NBER, which almost certainly means there will be no announcement until after the midterms.

Originally Posted by wareyin

I'm sure that you can find this "classic definition" written down somewhere, right? But that certainly doesn't matter because a non-partisan organization is definitely in the tank for the Dems! : thumbsup :

: rolleyes :

"You know how the NBER consistently declares a recession after two consecutive quarters of negative GDP growth? Well we just had two consecutive quarters of negative GDP growth. I guess that means we're in a recession."

"No! Wrong! Only the NBER is allowed to notice those numbers and tell us about them! You can't know about a recession until the high priests issue their decrees ex cathedra! Now shut up, sit down, and recite your catechism like a good little catholic." Effing protestants I swear.

Puppycow · 5th August 2022, 01:08 PM

YouTube Video This video is not hosted by the ISF. The ISF can not be held responsible for the suitability or legality of this material. By clicking the link below you agree to view content from an external website.

I AGREE

Some analysis of the real estate crisis in China. Could be a big deal, maybe. One thing for sure is that China wants to suppress this news.

wareyin · 5th August 2022, 01:09 PM

Originally Posted by theprestige

"You know how the NBER consistently declares a recession after two consecutive quarters of negative GDP growth? Well we just had two consecutive quarters of negative GDP growth. I guess that means we're in a recession."

"No! Wrong! Only the NBER is allowed to notice those numbers and tell us about them! You can't know about a recession until the high priests issue their decrees ex cathedra! Now shut up, sit down, and recite your catechism like a good little catholic." Effing protestants I swear.

Or...and this is where things might be too complicated for you so stay with me...NBER doesn't use 2 quarters of negative GDP growth and only 2 quarters of negative GDP growth to declare a recession. It's not like it was even pointed out in this thread that NBER declared a 2 month (which, for those struggling with the numbers is less than 1 quarter and also a lot less than 2 quarters) recession for the spring of 2020.

Puppycow · 5th August 2022, 01:13 PM

Originally Posted by theprestige

"You know how the NBER consistently declares a recession after two consecutive quarters of negative GDP growth? Well we just had two consecutive quarters of negative GDP growth. I guess that means we're in a recession."

"No! Wrong! Only the NBER is allowed to notice those numbers and tell us about them! You can't know about a recession until the high priests issue their decrees ex cathedra! Now shut up, sit down, and recite your catechism like a good little catholic." Effing protestants I swear.

Technically, GDP numbers are subject to revision, and numbers for the most recent two quarters will always be preliminary estimates. I don't dispute that there is a recession, but it doesn't really become official until those preliminary estimates a finalized. They could be revised up or down.

theprestige · 5th August 2022, 03:41 PM

Originally Posted by Puppycow

YouTube Video This video is not hosted by the ISF. The ISF can not be held responsible for the suitability or legality of this material. By clicking the link below you agree to view content from an external website.

I AGREE

Some analysis of the real estate crisis in China. Could be a big deal, maybe. One thing for sure is that China wants to suppress this news.

Maybe they should reach out to the NBER, make sure they don't say anything counter-productive to Chinese interests.

theprestige · 5th August 2022, 03:42 PM

Originally Posted by Puppycow

Technically, GDP numbers are subject to revision, and numbers for the most recent two quarters will always be preliminary estimates. I don't dispute that there is a recession, but it doesn't really become official until those preliminary estimates a finalized. They could be revised up or down.

Point taken. I'll keep that in mind going forward. Thanks!

Puppycow · 5th August 2022, 05:50 PM

Originally Posted by theprestige

Point taken. I'll keep that in mind going forward. Thanks!

Actually, I should revise what I said above slightly. There are GDP numbers released each month. The first two are preliminary and the third one is final. So Q1 is now final. Q2 is still preliminary:

https://www.investing.com/economic-calendar/gdp-375

I also think that the NBER uses a more complicated formula to define a recession than two consecutive quarters of negative GDP growth:

https://www.nber.org/research/business-cycle-dating

It's very unusual to have strong job growth, like the most recent jobs report, in the middle of a recession.

13th July 2022, 07:53 PM	#1
Orphia Nay Penguilicious Spodmaster. Tagger Photo Contest Winner Join Date: May 2005 Location: Ponylandistan Presidential Palace (above the Spods' stables). Posts: 40,581	Recession? Will we have a global recession? Several local recessions? Thought it was worth a thread. Wikipedia while I'm here: "In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock, the bursting of an economic bubble, or a large-scale anthropogenic or natural disaster (e.g. a pandemic). In the United States, it is defined as "a significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales". In the United Kingdom, it is defined as a negative economic growth for two consecutive quarters. "Governments usually respond to recessions by adopting expansionary macroeconomic policies, such as increasing money supply or increasing government spending and decreasing taxation." https://en.wikipedia.org/wiki/Recession?wprov=sfti1
	__________________ "We stigmatize and send to the margins people who trigger in us the feelings we want to avoid" - Melinda Gates, "The Moment of Lift".

13th July 2022, 09:58 PM	#2
psionl0 Skeptical about skeptics Join Date: Sep 2010 Location: 31°57'S 115°57'E Posts: 19,277	Originally Posted by Orphia Nay Will we have a global recession? Several local recessions? We appear to be experiencing the opposite problem ATM - inflation caused by global market shortages - especially labour. Central banks are trying to do the opposite of recessionary measures. They are trying to restrict the money supply by jacking up interest rates. Of course, things could change on a button considering the corona virus pandemic and the Ukranian war.
	__________________ "The process by which banks create money is so simple that the mind is repelled. Where something so important is involved, a deeper mystery seems only decent." - Galbraith, 1975

14th July 2022, 09:09 PM	#3
Puppycow Penultimate Amazing Join Date: Jan 2003 Location: Yokohama, Japan Posts: 27,248	Originally Posted by Orphia Nay Will we have a global recession? Several local recessions? Probably. Certainly a slowdown, at least. The world's second-largest economy: China’s GDP growth misses expectations in the second quarter Quote: China eked out GDP growth of 0.4% in the second quarter from a year ago, missing expectations as the economy struggled to shake off the impact of Covid controls. Analysts polled by Reuters had forecast growth of 1% in the second quarter. USA: Bank of America slashes S&P 500 target to ‘lowest on the Street’ after recession forecast Quote: Bank of America has lowered its 2022 target for the S&P 500 by 900 points, to 3,600, citing its forecast for a recession this year and expectations for a Federal Reserve “pivot” in 2023. The new year-end target is “the lowest on the Street,” said equity and quant strategists at Bank of America in a BofA Global Research report Thursday. BofA now forecasts a “mild” U.S. recession starting in the second half of 2022, they said. Right now the Fed is more concerned with squashing inflation. They may need to cause a recession to achieve that.
	__________________ A fool thinks himself to be wise, but a wise man knows himself to be a fool. William Shakespeare

17th July 2022, 07:10 PM	#4
Brainster Penultimate Amazing Join Date: May 2006 Posts: 19,067	The US is likely to have a mild-moderate recession,like the rest of Europe and Japan. Countries in the second and third world may see food riots, like those happening in Sri Lanka.
	__________________ My new blog: Recent Reads. 1960s Comic Book Nostalgia Visit the Screw Loose Change blog.

27th July 2022, 07:38 PM	#5
The Atheist The Grammar Tyrant Join Date: Jul 2006 Posts: 32,066	Originally Posted by Orphia Nay Will we have a global recession? Yes. https://www.bbc.com/news/business-62310354 From what I can see, I think USA, NZ, UK, Italy and several other countries are currently in a recession, with this being the second quarter of contraction. Does it matter? That's the question, and I think the answer to that is probably yes as well. People are already deciding not to eat so they can feed their kids, so if things don't improve quickly I think we'll see some very negative results. Governments are pretty powerless, with infrastructure spending not on the table because the resources to do the work isn't there. We need a reduction in energy prices toot-sweet, and I don't see that happening.
	__________________ The point of equilibrium has passed; satire and current events are now indistinguishable.

28th July 2022, 10:47 AM	#6
Brainster Penultimate Amazing Join Date: May 2006 Posts: 19,067	Two consecutive quarters of negative GDP growth in the US. Of course the media is quick to remind us that while that is considered the classic definition of a recession, technically it has to be announced by the wonks at the NBER, which almost certainly means there will be no announcement until after the midterms.
	__________________ My new blog: Recent Reads. 1960s Comic Book Nostalgia Visit the Screw Loose Change blog.

28th July 2022, 11:01 AM	#7
wareyin Philosopher Join Date: Oct 2013 Location: Georgia, USA Posts: 9,939	Originally Posted by Brainster Two consecutive quarters of negative GDP growth in the US. Of course the media is quick to remind us that while that is considered the classic definition of a recession, technically it has to be announced by the wonks at the NBER, which almost certainly means there will be no announcement until after the midterms. I'm sure that you can find this "classic definition" written down somewhere, right? But that certainly doesn't matter because a non-partisan organization is definitely in the tank for the Dems!

28th July 2022, 03:48 PM	#8
Startz Muse Join Date: Nov 2004 Location: Santa Barbara, CA Posts: 651	For those curious, the NBER declared a 2 month long recession for Spring 2020...somewhat over a year after the end of that recession.

5th August 2022, 09:12 AM	#9
Brainster Penultimate Amazing Join Date: May 2006 Posts: 19,067	Granted, unemployment and job gains are a lagging indicator, but seriously, 528,000 new jobs and an unemployment rate of about 3.5%? This is definitely a Jekyll/Hyde economy. Of course the jobs report could put more pressure on the Fed to raise rates again. The key will be the inflation numbers next week. I will say anecdotally that I have seen price declines on some of the food products I buy regularly; not to pre-2021 levels, but noticeable, and of course gasoline is the same. So they might get some break there but maybe not, since CPI-U excludes the volatile food and energy components.
	__________________ My new blog: Recent Reads. 1960s Comic Book Nostalgia Visit the Screw Loose Change blog.

5th August 2022, 10:16 AM	#10
Puppycow Penultimate Amazing Join Date: Jan 2003 Location: Yokohama, Japan Posts: 27,248	Funny how good news is bad for stocks: Stocks fall after strong July jobs report points to more Fed action Quote: Stocks fell Friday in a volatile trading session after the July jobs report was much better than expected, as investors assessed what a strong labor market would mean for the Federal Reserve’s rate tightening campaign. . . . The labor market added 528,000 jobs in July, easily beating a Dow Jones estimate of a 258,000 increase. The unemployment rate ticked down to 3.5%, below the 3.6% estimate. Wage growth also rose more than estimated, up 0.5% for the month and 5.2% higher than a year ago, signaling that high inflation is likely still a problem.
	__________________ A fool thinks himself to be wise, but a wise man knows himself to be a fool. William Shakespeare

5th August 2022, 11:32 AM	#11
TragicMonkey Poisoned Waffles Join Date: Jun 2004 Location: Monkey Posts: 63,477	It's almost as if economies are too complex to easily attribute effects to particular immediate causes.
	__________________ You added nothing to that conversation, Barbara.

5th August 2022, 12:39 PM	#12
theprestige Penultimate Amazing Join Date: Aug 2007 Location: The Antimemetics Division Posts: 60,194	Originally Posted by Brainster Two consecutive quarters of negative GDP growth in the US. Of course the media is quick to remind us that while that is considered the classic definition of a recession, technically it has to be announced by the wonks at the NBER, which almost certainly means there will be no announcement until after the midterms. Originally Posted by wareyin I'm sure that you can find this "classic definition" written down somewhere, right? But that certainly doesn't matter because a non-partisan organization is definitely in the tank for the Dems! : thumbsup : : rolleyes : "You know how the NBER consistently declares a recession after two consecutive quarters of negative GDP growth? Well we just had two consecutive quarters of negative GDP growth. I guess that means we're in a recession." "No! Wrong! Only the NBER is allowed to notice those numbers and tell us about them! You can't know about a recession until the high priests issue their decrees ex cathedra! Now shut up, sit down, and recite your catechism like a good little catholic." Effing protestants I swear.
	__________________ There is no Antimemetics Division.

5th August 2022, 01:09 PM	#14
wareyin Philosopher Join Date: Oct 2013 Location: Georgia, USA Posts: 9,939	Originally Posted by theprestige "You know how the NBER consistently declares a recession after two consecutive quarters of negative GDP growth? Well we just had two consecutive quarters of negative GDP growth. I guess that means we're in a recession." "No! Wrong! Only the NBER is allowed to notice those numbers and tell us about them! You can't know about a recession until the high priests issue their decrees ex cathedra! Now shut up, sit down, and recite your catechism like a good little catholic." Effing protestants I swear. Or...and this is where things might be too complicated for you so stay with me...NBER doesn't use 2 quarters of negative GDP growth and only 2 quarters of negative GDP growth to declare a recession. It's not like it was even pointed out in this thread that NBER declared a 2 month (which, for those struggling with the numbers is less than 1 quarter and also a lot less than 2 quarters) recession for the spring of 2020.

5th August 2022, 01:13 PM	#15
Puppycow Penultimate Amazing Join Date: Jan 2003 Location: Yokohama, Japan Posts: 27,248	Originally Posted by theprestige "You know how the NBER consistently declares a recession after two consecutive quarters of negative GDP growth? Well we just had two consecutive quarters of negative GDP growth. I guess that means we're in a recession." "No! Wrong! Only the NBER is allowed to notice those numbers and tell us about them! You can't know about a recession until the high priests issue their decrees ex cathedra! Now shut up, sit down, and recite your catechism like a good little catholic." Effing protestants I swear. Technically, GDP numbers are subject to revision, and numbers for the most recent two quarters will always be preliminary estimates. I don't dispute that there is a recession, but it doesn't really become official until those preliminary estimates a finalized. They could be revised up or down.
	__________________ A fool thinks himself to be wise, but a wise man knows himself to be a fool. William Shakespeare

5th August 2022, 03:42 PM	#17
theprestige Penultimate Amazing Join Date: Aug 2007 Location: The Antimemetics Division Posts: 60,194	Originally Posted by Puppycow Technically, GDP numbers are subject to revision, and numbers for the most recent two quarters will always be preliminary estimates. I don't dispute that there is a recession, but it doesn't really become official until those preliminary estimates a finalized. They could be revised up or down. Point taken. I'll keep that in mind going forward. Thanks!
	__________________ There is no Antimemetics Division.

5th August 2022, 05:50 PM	#18
Puppycow Penultimate Amazing Join Date: Jan 2003 Location: Yokohama, Japan Posts: 27,248	Originally Posted by theprestige Point taken. I'll keep that in mind going forward. Thanks! Actually, I should revise what I said above slightly. There are GDP numbers released each month. The first two are preliminary and the third one is final. So Q1 is now final. Q2 is still preliminary: https://www.investing.com/economic-calendar/gdp-375 I also think that the NBER uses a more complicated formula to define a recession than two consecutive quarters of negative GDP growth: https://www.nber.org/research/business-cycle-dating It's very unusual to have strong job growth, like the most recent jobs report, in the middle of a recession.
	__________________ A fool thinks himself to be wise, but a wise man knows himself to be a fool. William Shakespeare