Officially, we’re still not in a recession, because the economy hasn’t contracted two quarters in a row. The National Bureau of Economic Research can declare a recession without a decline in GDP, but it appears they agree with Phil Gramm: the recession’s just mental. WSJ:
“At the moment, we’re sort of skimming along,” with the economy expanding slowly because of a boost from economic-stimulus checks and strong exports, says Jeffrey Frankel, a Harvard professor and committee member.
Members say they aren’t sure whether they will classify the current economy as in a recession. “It’s hard for me to imagine doing so without a single negative quarter,” says Mr. Frankel.
The NBER would probably be doing the right thing if they expanded the definition of a recession in this case to accomodate the unprecedented combination of stagnant output, soaring inflation, and plunging asset prices. While actual economic output, as measured in GDP, has yet to swing into the red, most Americans, as a result of flat wage growth, higher consumer prices, and declining house prices, have lost wealth in the last year or two in real terms.