by Jeffrey P. Snider
We have to acknowledge that economic statistics are imperfect even under the best conditions. But that doesn’t mean we shouldn’t try to measure comparative circumstances where conditions are less than ideal or conventional. In terms of a business cycle, we think of recession as negative GDP; to the point that conventional “wisdom” actually believes two consecutive quarters defines one. Not even the NBER describes their “job” that way.
Because our current economic circumstances don’t fit in the traditional cyclical mold, we are left to some extent making raw judgments about the state of the economy and ultimately about just how impaired it is. The purpose of doing so is the hope of figuring how further impaired it might become. Undisciplined comparisons run high risk of being misleading even with the best intentions.