šµ What does a recession really mean?
we all know itās bad when we hear the word ārecessionā all the timeā¦ š
but we just look at our stocks go down and say āyeahā¦ the recession am i rightā
yes, well, kinda, but not quiteā¦
š the definition:
typically, itās officially a recession when GDP falls for two consecutive quarters ā because this straight up means reduced economic activity, trade, industrial activity, etc.
quick formula: GDP = Consumption + Investment + Gov't Spending + (Exports - Imports)
more strictly though, NBER (National Bureau of Economic Research) are the ones that officially declare a recession and their definition is:
āsignificant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail salesā
(so a lilā different but you get the pictureā¦!)
š¤· so how is the US GDP doing?
![](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fd0cecad7-eb5e-4d9c-ad10-56c5c4221828_2308x856.png)
as you can see above, US GDP for Q1 ā22 fell at a 1.4% annualized rate, while most analysts expected a +1% gain.
this means that we are one quarter away from an official recession š°
gotta go back to finishing up Jian Yangās pitch ā have a great Saturday yāall!
this is my second post everā¦ please bear with me as i try to make this better in content, design, form, etc. this will be a learning experience for myself as well!
thank you for your patience, and always send me your questions or any suggestions you have with Ask a Wise Ape!