WASHINGTON, July 5 (Reuters) – By some early estimates, the U.S. economy, as measured by gross domestic product, may have shrunk in the three months from April through June. Add that to the decline from January through March, and that would be a contraction for two quarters in a row.
By an often-cited rule of thumb, that means the world's largest economy is in recession.
But deciding when a recession has begun or predicting when one might occur is not straightforward. The “two quarters” definition is not how economists think about business cycles, because GDP is a broad measure that can be influenced by factors like government spending or international trade. Instead, they focus on factors like jobs, industrial production, and incomes.