The possibility is discussed somberly and ominously and anticipated as if it were an impending earthquake or volcanic eruption. But when it actually occurs it provides no sign of any sort by which it may be recognized.
It is recession, a subject that would leave a gaping hole in news reports if it couldn't be forecast, discussed, warned about or looked back on. But when it comes and when it goes nobody knows, and it makes no difference anyway.Yet, if there were an economic question of the day, so to speak, the question of whether we're in a recession would win by default. No other economic question is posed more often, or more often left unanswered.
Making the situation even harder to understand is that the questions and the answers really have little or no significance other than to satisfy the nagging desire for perfection in a very imperfect economic science.
The word "recession" is really just a technical word for a weakened economy. It is not a scientific term in the same sense as, for instance, superconductivity or hypertension, two other terms used quite often today.
It is very important to almost everyone when the economy weakens. There is no question about that. But it matters little to everyone or even anyone that the economy has crossed a somewhat arbitrary line and entered recession.
The definition most often used in declaring a recession to exist is when the total output of goods and services, the so-called gross national product, shrinks for two straight three-month periods.
Using that definition, you are of course in recession before you realize it, but so what? All along you might have thought the economy was merely weak, as indicated by your paycheck, your job security, your company's declining profits, your neighbor's layoff, the decline of state tax revenues and so on.
And, essentially, you were correct. The mere passing of a technical line on the way down didn't change the economy a bit; it didn't alter its appearance or its ingredients or make it any better or any worse. Not at all.
What it might have done is please those who had forecast a recession was coming, displease those who said it wasn't, satisfied economic technicians who made the discovery, endangered the political future of some elected officials.
But, unless the decline was abrupt, the declaration that a recession existed probably had no greater impact on your wallet than a comparable, non-recessionary economic weakening.
The occasion leaves not a trace. There is no great change in the month-to-month appearance or performance of an economy still advancing at an annual rate of one-tenth of one percent and one declining by the same amount.
Crossing the recessionary line is a non-event, an odd contrast to all the hulaballoo that precedes it. Far more important is whether the decline continues and for how long, and whether it deepens or weakens.
Events on the way up from recession are similar. Nobody really knows that the line is crossed until months afterward. And nobody should really care. The important thing is that growth has resumed.