Updating a blog last June:
We hear (or read) these days contradictory comments on the state of the U.S. economy. Is it a recession or not?
Recall the usual definition of a recession: a period of at least 2 quarters in a row with negative growth real GDP.
Even if she is anemic, growth is slightly positive so far. Look at the chart above, taken from the journal National Economic Trends, Fed of St. Louis in August 2008. Note that it is possible that growth is negative in the third quarter (which started July 1), and the next quarter, but no numbers yet. So they may be in recession, but we do know that in the winter.
In effect, European economies seem worse off than the U.S. economy. See in this connection table, taken from The Economist, 6 September 2008. It shows the top and left, that growth last quarter in the euro area is negative.
Note also that due to the natural growth of the labor force and productivity growth, as soon as economic growth falls below a certain level (in Canada, about 2.5% on average) the unemployment rate increases, even if growth remains positive. Unemployment on the rise is not necessarily indicative of a recession.
