- Recently, the U.S. government has redefined the actual meaning of recession.
- The precautionary step has been taken to prevent the economy from falling into recession.
According to the Council of Economic Advisors, the new meaning of a recession is two successive quarters of falling real growth will not be considered a recession and will be accepted easily.
Recessions and economists of the country are stuck to the point that the economic activity will be evaluated on the grounds of specific data, which consists of the labor market, consumer and business spending, industrial production, and incomes.
Basically, if data collected on these grounds will fall negatively in GDP in two consecutive quarters will be defined as a recession.
On Thursday, new data was released by economists polled by Reuters in which the second quarter is strongly expected to rise about 0.4%, which stood at a 1.6% annual rate in the first quarter.
On Monday, the crypto market fell drastically following the fall in bitcoin and Ethereum by 3.7% and 7.5%, respectively, after comparing it from the last week.
The GDP report of the second quarter, along with many prime corporate earnings, is expected to be released in the coming few days.
In June 2022, the U.S. got a rise of 9.1%, which is a 40-year high simultaneously; it may increase interest rates by 75 basis points by the Federal Reserve.
This type of competition may lead to massive inconsistency in the global and crypto industries.
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Different definitions of recession
According to the Treasury Secretary of the United States, Janet Yellen stated that the economy of the U.S. is not facing a recession because of consumer spending and a strong labor market. She did not deny the point that the country’s economic growth is slower than usual and does not predict whether the country will face a recession in the future.
The National Bureau of Economic Research defines a recession as a drastic fall in a country’s economic activity lasting more than a few months. It is judged based on personal income, jobs, consumer spending, and industrial production.
An American journalist took Twitter to make his point and defined recession as the fall of economic growth in two consecutive quarters. He declared the decision to redefine the word as Orwellian because everyone knows the actual meaning of the word.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
Source: https://www.thecoinrepublic.com/2022/07/26/us-government-redefines-the-meaning-of-recession/