EXPLAINER: How do we know when a recession has begun?

By CHRISTOPHER RUGABER
AP Economics Writer

WASHINGTON (AP) — The government has updated its estimate of the U.S. economy’s performance in the April-June quarter and confirmed what it had reported last month: That the economy shrank for two straight quarters. Six months of contraction is a long-held informal definition of a recession. Yet nothing is simple in the post-pandemic economy. Growth may be negative, but the job market is strong. Even as the economy shrank over the first half of this year, employers added 2.7 million jobs — more than in most entire years before the pandemic struck. While most economists — and Fed Chair Jerome Powell — have said they don’t think the economy is in recession, some analysts still predict that an economic downturn will begin later this year or next.