As measured by GDP, the economy grew at 1.9% for the second quarter of this year, which was lower than the expectations for 2.3% growth. First quarter 2008 GDP was revised down from 1% to 0.9%, and Fourth quarter 2007 GDP was revised down from a gain of 0.6% to a loss of 0.2%. This could be the start of a recession. The NBER is the institution who officially calls a recession, and a recession is defined as two consecutive quarters of negative GDP growth. But like Fed chairman Ben Bernanke told Congress back in February, recessions are usually called after the fact, and even then it’s subjective.
So we’ve officially got Q42007 GDP as negative following an 80 basis point downward revision. Q12008 GDP is +90 basis points now, so it wouldn’t take much more of a revision next quarter to go to zero or negative, and then the NBER could make it official. Subjectively speaking. And after the fact. If you’re not walking around in $520 shoes like John McCain, you’re probably way ahead of the NBER in calling a recession based on your household budget.