By the most common definition, the United States will likely be in an official recession as of Thursday. The Biden administration is attempting to redefine a recession to avoid it, and the media is running with it.
The standard definition of a recession is two consecutive quarters of negative GDP growth. The economy had a negative GDP growth last quarter, and another is expected to be announced this Thursday.
Biden’s definition of a recession is different. A public statement from the administration titled “what is a recession?” examines a recession through a “holistic look at the data.” It defines a recession through a complicated formula that compares unemployment in the past twelve months. The new definition would mean America is not in a recession and likely won't be in the near future.
The Associated Press decides to play ball. Yesterday, the news wire published an explainer titled “How do we know when a recession has begun?” and took the Biden approach by rejecting the standard definition of a recession and instead focusing on employment.
Wikipedia plays ball too. Earlier this week, the Wikipedia page for a recession was edited almost 41 times. The website then prohibited further edits to the page and amended the following to their definition of the economic term:
"There is no global consensus on the definition of a recession."
Big picture: Biden’s new definition of a recession is politically beneficial because, with it, the United States isn’t in a recession, an event that would significantly hurt Democrats before the midterms. Despite the fact that the definition rejects the long-held understanding of a recession, legacy media outlets are running with it.