So, we are in a ‘technical recession’. Sounds bad. The economists and news outlets could have been less dramatic and simply told us that, for the second quarter in a row, we didn’t grow.
And why is it called a technical recession and not simply a recession? A recession is a sustained period of weak or negative growth in real GDP (output) accompanied by a significant rise in the unemployment rate. A technical recession, on the other hand, is a more specific term that refers to two consecutive quarters of negative growth in real GDP. It doesn’t matter how small the negative growth is, or if there are external factors that have recently shocked the economy, two quarters in a row with negative growth, and we can officially use the r-word.