In the season of summer vacations with kids in the backseat asking, “are we there yet?”, the same question could be applied to the recession that many investors and economists have been predicting for the U.S. economy. The dynamics of the domestic economy can make it a bit more complicated to answer that question.
“In England it’s real simple. It’s two quarters of declining GDP and if that were the simple definition, we’d probably be in a recession right now,” said Guy Williams, President of Gulf Coast Bank and Trust.
On the Newell Normand show this week, Williams explained some of the factors at play in determining whether or not a recession has arrived. Williams said while the Federal Reserve Bank of Atlanta is reporting GDP is down in the second quarter of this year (this is following a decline in Q1), the body responsible for ultimately making the call on a recession is the National Bureau of Economic Research.
“So, it’s like the umpire in baseball, you can think it’s a strike, but it’s the umpire that calls it,” Williams told Newell.
It may already feel like a recession for many of us, but there are more boxes that need to be checked before it becomes official. Listen to what else needs to happen before a recession is declared: in the audio box above.