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The Graphic Truth: Is the US economy in a recession?
The short answer is: we don't know (yet).
The US economy declined 0.9% in the second quarter of 2022 compared to the previous three months after shrinking 1.6% in January-March, entering, in theory at least, a "technical recession" — economist-speak for two consecutive quarters of economic contraction. But does that make it official? Nope.
Many economists regard that definition as too narrow because it doesn't take into account other indicators beyond real GDP performance. Indeed, the National Bureau of Economic Research, which calls the shots on US economic cycles, says, rather vaguely, that a recession is "a significant decline in economic activity that is spread across the economy and that lasts more than a few months."
To determine what qualifies as a recession, the NBER considers a bunch of other measures of economic activity. These include real wages (minus inflation), industrial activity, or employment — measured by household surveys, not the number of Americans applying for unemployment benefits, now historically low at 3.6% of the workforce.
Also, the NBER takes time to make the call. So don’t be surprised if Americans feel they're in a recession way before the experts decide to label it as such. It’s also possible to have a recession without two consecutive quarters of economic contraction, like in 2001.
In a nutshell: don't buy all the recession chatter for now, but keep an eye out. Even if the Biden administration won’t say the R-word out loud and the Fed still hopes for a soft landing, most economists agree the US economy is more likely than not headed to a recession in 2023, if not earlier.Why President Biden's first 100 days matter
President Biden has set an ambitious agenda for his first 100 days in office. Why is there so much pressure riding on that small amount of time, which is less than 7% of an American president's four-year term? Ian Bremmer explains how the "first 100 days" idea started 88 years ago, when President Franklin Delano Roosevelt had to pull the United States out of the greatest economic crisis the modern world had ever known.
Watch the GZERO World episode: After the insurrection: will Congress find common ground?
The new wave of innovation is cause for business optimism about 2021
Kevin Sneader, Global Managing Partner at McKinsey & Company, provides perspective on what corporate business leaders are thinking during the global coronavirus crisis:
Should businesses be pessimistic or optimistic about 2021?
It's easy to be gloomy about the year ahead when faced with the realities of a cold, bleak winter in much of the world. Add to that lockdowns across Europe, surging case numbers and hospitalizations, and dreadful events in the Capitol in the US to name a few reasons for pessimism. But I think there is a case for optimism when it comes to this year. After all, it's true to say that it's always darkest before the dawn, and my conversations with business leaders suggest there are reasons to be positive by 2021.
Consider the following, yes, the vaccines are on their way, but so too is the impact of a wave of innovation. Twice the number of new business applications in the US and significant increases in new business starts in Germany, France, the UK and Japan. It's not just the digital economy that is reshaping lives, but science more generally with the impending bio revolution. And new ways of working are being accepted. Manufacturing is reviving and many sectors are seeing signs of confidence returning.
The great Anglo-Irish explorer Ernest Shackleton when faced with a life-or-death challenge of survival in the Antarctic commented, "optimism is true moral courage." It's time for some of that courage as we tackle 2021 with optimism.
Thailand's economic conditions tipped to worsen as coronavirus spreads
More than half of survey respondents predict the Thai economy will be even worse in 2021 than it was last year.
Xi touts China's success in controlling virus outbreak and poverty eradication
BEIJING • Chinese President Xi Jinping touted his government's success in controlling the Covid-19 outbreak, and its hard-won achievements in economic recovery and poverty eradication in 2020, in an address which analysts said emphasised the importance of people and set key national development and economic goals for this year.
Asian economies lead ranking of most efficient healthcare systems
HONG KONG • As a pandemic ravaged the world, Asian economies led by Singapore, Hong Kong and Taiwan topped a ranking of most efficient healthcare systems.
Ian Bremmer on the State of the World: COVID-19, the great accelerator
Watch Ian Bremmer's full speech on "The State of the World." Today, this annual address has kicked off the 2020 GZERO Summit in Japan.
The coronavirus pandemic hasn't invented today's biggest challenges. For better and for worse, it simply accelerated important changes that were already well underway. It has exacerbated inequality of opportunity, both within and among countries. In fact, the most severe COVID-19 impacts in 2021 will be economic, particularly as debts soar in developing countries and international lenders have less to lend. The pandemic has also sped up the erosion of faith in democratic institutions and international cooperation. But the economic damage inflicted by this crisis has accelerated the transition from the 20th century brick-and-mortar model of commerce and growth toward a more dynamic 21st century economy that is powered more by the flow of information and less by fossil fuels. In short, thanks in part to the worst global health emergency in more than a century, the future will arrive sooner than we thought.
Premier Li sees economy returning to 'proper' range next year
BEIJING • China will likely return to a more "proper" range of economic development next year, Premier Li Keqiang said, indicating a strong rebound in growth after this year's pandemic slump.