Recession?

So preliminary reports of GDP are saying that in the third quarter, real GDP decreased at an annual rate of 0.3%. It should be noted that this isn't official yet - that should be released around November 25. But this leads to the question, "Are we in a recession?"

The problem with answering this question is there is no cut and dry definition of a recession. Obviously it's a shrinking of real GDP (as opposed to a slow down - there has to be negative growth), but the question is how long (how many consecutive quarters) does there have to be this negative growth. A rule of thumb is two - which means that we're not in a recession. There was positive growth (around 2%, I think) in the second quarter, thanks to all those tax rebates.

But when it comes down to it, nothing is expected to change for the fourth quarter, which would mean two consecutive quarters of negative growth, which would mean, according to the rule of thumb, we're in a recession.

But does this really surprise anybody?