The Economic Perspective: “Who Calls a Recession?”

Mary: This is Mary Walden with economist MW welcoming you to the economic perspective. Today’s program asks, who calls a recession.  Mike, the country is potentially heading into a recession – or actually may even be in a recession – caused by the coronavirus.  How do we know a recession is occurring?   Who or what makes that determination?

 

Mike:  Summary Answer

  • On a practical matter, people can tell there’s a recession – job loss or layoffs, people are pessimistic about the economy
  • But a group – called the NBER – makes the call
  • Private economics think tank around for over 100 years
  • Look at depth and breadth of an economic contraction – job loss, spending reductions, falling revenues to businesses
  • NBER wants to make sure reductions are significant, and are widespread across the economy
  • Unfortunately, official call will often be made after the recession, because data are released with a considerable lag
  • Today, will be significant drop – most economists think a recession is assured
  • I’m MW

 

Mary:  And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.