What is a recession, and who decides?
The official definition of a US recession, why "two quarters of falling GDP" is only a rule of thumb, and the signs that usually show up first.
A recession is a broad, lasting fall in economic activity: people lose jobs, companies cut back, incomes and spending shrink, and the slowdown spreads across most industries rather than staying in one corner of the economy.
Who calls it
In the United States there is no government announcement. The dating is done by the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER), a private, non-partisan research group. It defines a recession as a significant decline in economic activity that is spread across the economy and lasts more than a few months.
The committee looks at many monthly measures, above all employment, real personal income, consumer spending and industrial production, and decides when the economy peaked and when it hit bottom. It is deliberately slow: it usually waits until the data have been revised and the picture is clear, so its announcements often come many months after a recession has begun, and sometimes after it has already ended.
The "two quarters" rule of thumb
You will often read that a recession means two quarters in a row of falling real GDP. That is a handy shortcut, and it matches most past recessions, but it is not the official definition. A short, sharp collapse like the one in spring 2020 counts as a recession even though it lasted only two months, and two small quarterly declines in GDP do not count if jobs and incomes keep growing.
What usually shows up first
Because the official verdict comes late, it helps to watch the measures that move early:
- Jobs. Hiring slows, then payrolls start to fall and the unemployment rate climbs. Right now the unemployment rate is 4.2% for September 2026.
- Jobless claims. Weekly claims for unemployment insurance rise before the monthly jobs report shows layoffs. See what jobless claims tell you.
- The Sahm rule. A quick test based on the unemployment rate that has flagged every US recession since 1970. See the Sahm rule explained.
- The yield curve. When short-term interest rates rise above long-term ones, a recession has often followed within one to two years. See how to read the yield curve.
None of these is certain on its own. They are most useful together, which is why this site's recession watch counts how many warning rules are firing at once rather than relying on any single one.
How deep and how long
Most US recessions since the Second World War have lasted between a few months and a year and a half. The worst in that period, from December 2007 to June 2009, lasted 18 months. The shortest, in 2020, lasted two. What matters most for households is usually how high unemployment climbs and how long it takes to come back down, which can take years after the recession itself has officially ended.
On this site
The charts on Plain Vitals shade past recessions in grey, using the NBER dates, so you can see how any indicator behaved before and during each one. The growth pillar brings together the main measures of output, and real GDP, the broadest one, last read 24,408 billions of chained 2017 dollars for Q2 2026.