FACT CHECK: Recessions Don't Begin When the National Bureau of Economic Research Announces them - they start after two consecutive quarters of negative GDP growth.
The Organisation for Economic Co-operation and Development (OECD) of which the United States and most other developed nations are members, defines a recession as a decline in Gross Domestic Product (GDP) over at least two consecutive quarters.1 Virtually every high school economics textbook defines a recession similarly. In fact, college economics textbooks also define a recession, in the same way, allowing for circumstances one might not consider typical recessions referring to them as ‘technical recessions’. We now learn that the OECD and virtually every economist on the planet have been wrong about what constitutes a recession for nearly 100 years.
For the first time in American history, with just three months left until the midterm election, the White House announced that the definition of recession used by virtually every developed nation was never actually the definition of recession.2 Instead the White House explained that until a private corporation called the National Bureau of Economic Research (NBER) announces the country is in recession - it is not in recession. In fact, it turns out that just eight economists who serve on the Business Cycle Dating Committee (BCDC) are tasked with declaring the start and end date of recessions.
The White House, with their willing accomplices in the mainstream media, is pushing a narrative that Biden can claim, in good faith, that the country is NOT in a recession until the BCDC says it is. This, of course, is not true. The committee’s role is to look backward at the data and make a determination of the actual start and end of recessions allowing economists to work from agreed-upon dates. According to Harvard economist and current BCDC member Jeffrey Frankel, the AVERAGE lag between the start of a recession and the group’s announcement is 12 months.3 The fact of the matter is that recessions don’t wait for the BCDC - they happen and the committee merely uses available data to pinpoint their start and end dates for posterity.
Since the United States began releasing quarterly economic data in 1947 each time nominal GDP has declined in two successive quarters the NBER has determined the economy was in recession - and there is no doubt that they will do the same a year from now. Despite what the Biden administration would have you believe the ‘definition’ of a recession has not changed - they’re simply trying to avoid calling this recession a recession until AFTER the midterm elections.
Despite this reality, the White House successfully convinced4 fact-checkers like Politifact to reinforce their recession “wordplay” by denying the longstanding definition of recession AND denying that the Biden administration is attempting to advance an alternative definition.5 As a result of the White House’s statement AND the Politifact fact-check Facebook, Instagram, and Twitter have been labeling discussions that reject the White House’s wordplay as false misinformation.6 As Robby Soave points out, “This is yet another reminder that the project of purportedly independent fact-checking on social media is a highly partisan one, in which legitimately debatable opinions are passed off as objective truth.”
https://www.oecd.org/economy/growth/45276571.pdf
https://www.whitehouse.gov/cea/written-materials/2022/07/21/how-do-economists-determine-whether-the-economy-is-in-a-recession/
SEIBT, Sébastian. “États-Unis : Ces Huit Économistes Arbitres De La Récession.” France 24, France 24, 29 July 2022, https://www.france24.com/fr/%C3%A9co-tech/20220729-%C3%A9tats-unis-ces-huit-%C3%A9conomistes-arbitres-de-la-r%C3%A9cession.
https://www.whitehouse.gov/cea/written-materials/2022/07/21/how-do-economists-determine-whether-the-economy-is-in-a-recession/
Jacobson, Louis. “Politifact - No, the White House Didn't Change the Definition of ‘Recession.’” PolitiFact, Poynter Institute, 27 July 2022, https://www.politifact.com/factchecks/2022/jul/27/instagram-posts/no-white-house-didnt-change-definition-recession/.
Soave, Robby. “Facebook, Instagram Posts Flagged as False for Rejecting Biden's Recession Wordplay.” Reason.com, 30 July 2022, https://reason.com/2022/07/29/recession-facebook-fact-check-biden-politifact/.