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Published: Aug 08, 2022 6 min read
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Are we in a recession or not? It depends who you ask.

By one measure, the economy is shrinking. Gross domestic product — a statistic that experts use to measure economic output in the U.S. — fell at a rate of 0.9% last quarter, according to government data released last month. That follows a contraction of 1.6% in the first fiscal quarter.

Those two quarters of negative growth are enough to satisfy what many see as the technical definition of a recession, though the business cycle dating committee at the National Bureau of Economic Research uses a much more expansive definition that accounts for personal income, consumer spending and saving, industrial production and more. The NBER committee is tasked with formally pinpointing when the country is and isn't in a recession, but it has not yet taken that step.

(However, it often does this retroactively, so it’s possible we’re in a recession now.)

By other measures, the economy is doing well. The U.S. added more than 500,000 jobs in July, for instance, which indicates a strong labor market, and unemployment is very low by historical standards.

But amid rising prices — especially for essentials like groceries, gas and housing — and slower spending, it’s hard for many everyday consumers to believe the economy is in a good place. This confusing moment has economists, politicians and business leaders arguing about whether we’re in a recession or not... and whether that even matters.