I just posted on Wednesday that we have been in recession a year already, and also noted that we’ve not seen two quarters of negative growth. The determination of whether we are in recession is a bit more complex than this simple two quarter rule, and this Q&A by the National Bureau of Economic Research (the agency responsible for dating the peaks and troughs of the business cycle) offers a glimpse into their rationale:
Q: The financial press often states the definition of a recession as two consecutive quarters of decline in real GDP. How does that relate to the NBER?s recession dating procedure?
A: Most of the recessions identified by our procedures do consist of two or more quarters of declining real GDP, but not all of them.? As an example, the last recession, in 2001, did not include two consecutive quarters of decline. As of the date of the committee?s meeting, the economy had not yet experienced two consecutive quarters of decline.
Their report titled Determination of the December 2007 Peak in Economic Activity makes for some interesting reading.