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If a technical recession is two negative quarters in a row, could you please tell me what are the numbers relative to? For example, if the first quarter is up 2%, what is the next quarter judged against and does it have to be minus 2.1% to be negative, or just 1.9% (i.e. lower than the first).
A: It is a convention, rather than a hard fact. The convention is two consecutive quarters of negative growth.
In Australia (at least), growth is measured relative to the previous quarter’s outputs (incomes, expenditure, production).
If one quarter is say -2.1%, and the next quarter is perhaps +1.9%, while growth for the half year might be marginally negative, that doesn’t make it a recession. It would be deemed a recession, for example, if the first quarter was -0.1%, and the second quarter also -0.1%.
