The odds of the U.S. entering a recession are higher today than they were last week, many experts say, with the stock market reeling following President Donald Trump's decision to levy import tariffs on almost every country, and various nations weighing how to respond.
Social media is filled with claims that the U.S. has already entered a downturn with some users even coining the term “recession core,” that reflects an aesthetic trend of minimalism and practicality. TikTok users are identifying “recession indicators” in pop culture and fashion, or things that were popular during the Great Recession, regaining popularity.
“If yall are bringing back recessions, I’m bringing back capris,” Courtney Zamora joked on TikTok.
It's clear people are kidding around in many of the videos, but the number of posts online about an impending recession and stock market behavior show Americans are worried amid escalating trade wars.
But social media and stock prices don't determine when the country enters a recession, and the word does have an actual definition worth knowing as Americans feel economic uncertainty.
More: Are we going into a recession? Why it's not too late to prepare.
Who decides when the US is in a recession?
Eight economists who serve on the Business Cycle Dating Committee, within a nonprofit research organization not affiliated with the federal government known as the National Bureau of Economic Research (NBER), make the call.
They are appointed by the NBER president James Poterba, who has held the position since 2008, after consultation with committee chairs and the nonprofit’s board of directors.
The committee has maintained a chronology of U.S. business cycles since its creation in 1978. Without an alternate chronology compiled or published by the U.S. government, the committee became the go-to source for formally identifying recessions.
What is a recession?
The NBER defines a recession as a “significant decline in economic activity that is spread across the economy, lasting more than a few months.” Three criteria – depth, diffusion, and duration – need to be met individually to some degree to formally identify a recession, according to the NBER.
The committee considers several factors including real income, payroll employment, consumer spending, industrial production, and gross domestic product when making its determinations.
“Most of the recessions identified by our procedures do consist of two or more consecutive quarters of declining real GDP, but not all of them,” NBER explains on its website.
How fast does the committee decide if there is a recession?
The most recent and shortest recession in modern history was during the COVID-19 pandemic, lasting from February to April 2020.