We're not in a recession. Yet. Google and Facebook are ahead of the curve and mostly using the headlines to shake things up internally right now.
It does show that the billionaires are kind of enthusiastic though about the coming recession and economic pain being inflicted on the lower classes, and getting those uppity workers a bit more under control. They're not so worried about asset prices / stock prices / sales / etc and probably correctly assume that everything will rebound just fine for them.
Very often advertising is the fist thing companies cut when they run into problems. Google and Facebook are both advertising companies and they control very large section of that market. It's possible the data they are seeing is showing them problems ahead for the whole economy.
We are by the most common definition: two quarters of negative GDP growth.
Some folks in the US are weirdly insistent that recessions are defined by the NBER -- a self-appointed group of wonks at a private and secretive non-profit. But they're just one measure, and an arbitrary one at that.
> We are by the most common definition: two quarters of negative GDP growth.
That’s a common rule of thumb, but not the definition.
> Some folks in the US are weirdly insistent that recessions are defined by the NBER
These people include the US Department of Labor’s Bureau of Labor Statistics [0] and the US Department of Commerce’s Bureau of Economic Analysis [1], among others. The US has used a tripartite definition where a recession has three required dimensions, “duration, depth, and diffusion”, for a long time; the 2-quarter-decline thing has long been cited as a guideline for the duration component, with separate rules of thumb sometimes cited for the other two. [2]
[1] https://www.bea.gov/help/glossary/recession – stating “The designation of a recession is the province of a committee of experts at the National Bureau of Economic Research (NBER), a private non-profit research organization that focuses on understanding the U.S. economy.”
No, recessions are by definition “significant, widespread, prolonged” declines in economic activity [0]
[0] from https://www.investopedia.com/terms/r/recession.asp but the three dimensions are, with various terms, common (BLS and NBER use “duration, depth, and diffusion”, CD Howe Institute in Canada uses “pronounced, persistent, and pervasive decline in economic activity” [1].) The two-quarter-GDP-decline rule is a rule focussed on the prolonged/persistent/duration dimension, but which does not capture the other two dimensions.
> "decline in economic activity" is a decline in GDP.
No, GDP is one of many measures of activity in the economy.
Also, “significant, widespread, and prolonged” are important qualifiers, and quarterly GDP is relevant to at most two (significant and prolonged) of them.
> Nobody defines a recession as a decline in employment
Not employment alone, no. But income has long been recognized as part of the multidimensional set of indicators that determines recession.
The Congressional Research Service in a 2008 report wrote:
A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough. Between trough and peak, the economy is in an expansion. Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades.
This is the generally accepted view among economists of what constitutes an economic recession. There is also a commonly cited "rule of thumb" that is referred to in the press. That rule is that a recession is two consecutive quarterly declines in real gross domestic product (GDP). But this rule does not always apply.
In 1974, the BLS Commissioner provided this set of rules of thumb for the depth (“significant”), duration (“prolonged”), and diffusion (“widespread”) elements of recession; note that employment is a factor in two of the three elements, just like output (at the time, GDP had not yet replaced GNP as the preferred output measure):
In terms of duration—declines in real G.N.P. for 2 consecutive quarters; a decline in industrial production over a six‐month period.
In terms of depth—A 1.5 per cent decline in real G.N.P.; a 15 per cent decline nonagricultural employment; a two point rise in unemployment to a level of at least 6 per cent.
In terms of diffusion—A decline in nonagricultural employment in more than 75 per cent of industries, as measured over six‐month spans, for 6 months or longer.
That's simply not true. Policymakers may speak about NBER's findings, but there is no formal recognition of them in U.S. law.
They are private organization, they do not release their decision criteria publicly, and they were formed by random collection of academics that decided to start a club. They are entirely self-appointed.
> > The governments formal definition is that the NBER decides.
> That's simply not true
Yes, it is.
> Policymakers may speak about NBER's findings, but there is no formal recognition of them in U.S. law.
Not all official government actions are done by Congress as law.
US Department of Commerce’s Bureau of Economic Analysis says “The designation of a recession is the province of a committee of experts at the National Bureau of Economic Research” [0]
US Department of Labor’s Bureau of Labor Statistics describes NBER as “the official arbiter of U.S. recessions” [1]
In case you're not aware, your response is heavily implying that FB's stock falling is proof of a recession. That's why they responded by clarifying that the drop is due to future outlook of investors and not the economy at large.
Stock markets are investor sentiment, they aren't the real economy. They're connected, but they're not the same. Black Monday 1987 didn't correspond to any recession.
Perhaps we can discard the classic "two quarters of negative GDP growth". But if we do, then from whose perspective does a 3% drop in real wages in six months [1] (and a 4.4% YoY drop in real weekly earnings [2]) not count as a recession?
First, is there any precedent for that restriction?
And second, why not? If everyone still has a job but their wages have decreased, that's still an economic contraction, at least from the worker's perspective.
Everyone is lower class than the billionaires. A millionaire footballer can be screwed over by the billionaire owner of the club. I really think it helps to see that the power dynamics exist even at that kind of level.
I thought the original comment was referring to all tech workers, ie not independently wealthy as the lower classes. But it's also true that below principal level at companies there is different treatment. Just like a cto gets treated better than the senior principal.
The billionaire class is currently worried about the whole of the working class, it goes well beyond SWEs at Facebook and Google.
But Amazon being worried about organizing in their warehouses and Google and Facebook freezing hiring of SWEs and Musk's comments about how workers have become soft and overpaid (or whatever it was, I can't find the quote right now) are all different body parts of the same elephant.
And SWEs actually are "lower classes" (plural) compared to billionaires.
There might be a hierarchy of value, but that to me doesn't imply lower classes in the normal sense. We're talking about people being paid some of the best salaries in the history of the world, and with very little personal risk.
It does show that the billionaires are kind of enthusiastic though about the coming recession and economic pain being inflicted on the lower classes, and getting those uppity workers a bit more under control. They're not so worried about asset prices / stock prices / sales / etc and probably correctly assume that everything will rebound just fine for them.