• “We are altering the definition of recession. Pray that we don’t need to alter it any further.”
• Processing its grief over low approval ratings, the Biden administration has begun to bargain about the definition of “recession.” In financial circles, two consecutive quarters of shrinking GDP has traditionally been considered a recession. But the National Bureau of Economic Research, the most accepted arbiter of recession dating, has never officially adopted that definition. For example, the Covid recession saw only one quarter of contraction, but it was clearly a recession. If we are having another, it would be in uncomfortably quick succession. But the low unemployment numbers suggest that it would at least be starting mildly. On the third hand — remember Truman’s wish for a one-handed economist — this recession would also be taking place amid high inflation. Gas prices are thankfully declining, something President Biden risibly takes credit for. Expect the media to play along with Biden’s efforts to redefine success. But markets are smarter than the media, and they won’t be fooled.
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