Are We in a Recession?

Is the US in a recession?

Many people are asking that question since the Commerce Department reported yesterday that US GDP contracted in the 2nd quarter at an annualized rate of 0.9%. That comes on the heels of a 1.6% annualized contraction in the first quarter this year. The commonly understood technical definition of a recession is "two consecutive quarters of negative growth", so it would appear we're there. But it's not that simple.

Officially, recessions are determined by the National Bureau of Economic Research (NBER), a nonprofit organization. And within the NBER the Business Cycle Dating Committee, a group of 8 economists, decide when recessions happen. Generally the Dating Committee only determines that a recession began months after the two-consecutive-quarters definition was met. Largely that's because GDP numbers get revised all the time. Think of the figure announced yesterday as the preliminary number. It could be revised higher or lower as more data from Q2 becomes available.

In addition, the simple definition "two consecutive quarters of negative growth" is not just simple, it's simplistic. Many other factors determine whether the country is in a recession— a label that is fraught with social and political meaning.

A common ingredient of recession— and a key part of that social and political meaning— is unemployment. A recession is a time when unemployment rises, job growth is flat, and wages are stagnant. Right now none of these are the case. Unemployment is 3.6%, still low by historical standards. New jobs are still being added to the economy at a healthy pace, and wages are up a lot this year. Just look at all the stories in the news about how people are leaving jobs because they're being offered more money somewhere else, and employers are struggling to hire. Numerous government officials, from the Treasury secretary to the Federal Reserve chair, have pointed to labor data as a reason why we're not actually in a recession right now.

Keep reading: But most people think we're in a recession....

Trade Show Day 1

I'm in Los Angeles Thursday afternoon through Sunday this week to work a trade show. After setup yesterday today was Day 1 of the show itself.

I began the day early, having woken up around 4am then sleeping fitfully until about 6 before deciding, "Screw it, I'm up." I split my time between personal web surfing and working to calm a few of urgent issues with some customers & sales prospects. I also created a few intro slides for the workshop I'd give later in the day before taking a shower and dressing. Breakfast? I nibbled on a protein bar and drank a $5 bottle of soda while crafting slides.

Making the Workshop Work

The workshop I was teaching didn't start until 10, so around 8:45 I went to the show floor to check on my colleagues getting ready for booth duty. I thought then I might catch the opening keynote at 9, but just as it was due to start my co-presenter for the workshop popped in and warned me that he'd tried working the first exercise 3 times this morning and it failed. "Shit!" I thought to myself as I suggested we go to our workshop room to debug the failing system without distractions.

Good news/bad news: My coworker's problem was operator error. He made a rookie mistake— and at this point, after supposedly helping deliver variations of this workshop for two years, he ought to know better.

Workshop attendees started arriving early. We had 3 students already 10 minutes before the start of our period. Great! Right? But those were the only 3 students we got. I made the best out of it by making the seminar very interactive, taking lots of questions and sharing lots of colorful stories. ...Colorful stories about devops, that is.

The workshop schedule was 10-1, giving us our lunch break late. The conference team put out the lunch spread at 11:30. One student asked if we could break at 12, grab some food before it all disappeared, and come back to eat while we finished the class. "Sure," I said, thinking that lunch wouldn't be amiss. But by 12 the food was already pretty well picked over. I grabbed a snack and figured that'd have to tie me over to dinner.

We wrapped the workshop at 1:30. One of the students had left early but the other two were really pleased. I wish like hell we could get bigger crowds for these; at this level they're not even close to worth the effort.

On the Show Floor

By 1:45 I was on the show floor helping staff our booths. Yes, booths plural. There are two shows running together. One booth had all 3 of us technical people assigned to it while the other had none. That was absurd, so I unilaterally reassigned myself to the booth with nobody technical. Everybody else there, struggling to answer questions deeper than "What is your company?" was really happy about that.

The thing is, though, probing questions from attendees were extremely few and far between. Here's the typical dialogue I had with attendees at our booth:

"Hi, can I get this free piece of swag?"

"Sure. Hey, what do you know about [my company name]?"

"Nothing."

"Well, have you heard of [very common open source tool we're based on]?"

"No. What's that?"

"I'd be happy to tell you about it. But first tell me what your role is on a software team."

"I don't work in software."

I. Don't. Work. In. Software?? This is a devops conference. It's all about creating & delivering better software. Who's here that doesn't work in software?? Apparently: a) Jobless people. b) Kids. Yes, there are kid here. No, I don't mean "kids" as in people who look like they're under 35, I mean literal 12 year olds. Apparently the conference organizers figured the way to increase attendance of working parents was to let them bring their kids for free.

The Dumbest Booth Conversation Yet

The weirdest conversation I had wasn't with a child, though. It was with an adult who was totally clueless about the conference.

"Do you work for Linux?" she asked.

"Pardon me?"

"The show has 'Linux' in its name. I figure you all must work for them."

I won't relate the rest of the converastion. It didn't get any smarter from there. I'm not sure what she was doing at the show. Did she come to the wrong hotel by mistake? Was she here just to scam the free food? ...Because, let's be honest, the food was crap— not worth going any distance out of your way for!

Out of Energy this Evening

The show was scheduled 'til 6pm today. Attendees thinned out after 3. I figure that's because people who actually live in LA didn't want to get stuck in its infamous traffic during rush hour. By 5 many of our peers were shutting down their booths for the day. We started doing the same. By 5:30 a conference organizer came by and told us to leave for the day as soon as we were ready. One of our neighbors was already gone by then, their booth looking like it was ransacked.

After 6 my colleagues were debating where to go for dinner. I had a pretty good quorum aligned to the idea of "Somewhere comfortable, with good food, not too expensive, and not far away." Then one of my colleagues proposed, "Let's just eat at the hotel restaurant!" Oookay, that's definitely not far away, but it fails on "good food" and "not too expensive". It's hotel chain branded pap, the same they serve at airport hotels in the midwest, except here it's at airport prices. Meaning, a bland dinner is $40-55 before adding sides, drinks, tax, and tip.

I know my company's finance team throws a fit if meals are over expense guidelines— guidelines which, BTW, are $35 for dinner— so I opted not to eat bland food I might have to pay half of out of pocket. I walked 3 blocks down the street for pizza and a few glasses of beer. I ate my fill for less than $25.

It wasn't just money and avoiding arguments with accountants that sent me out on my own for dinner. I was so out of energy I didn't care to sit down at a big table with colleagues. I ate by myself, happy to not have to talk to anyone, and I'm now back up in my room, happy not even to have to see anyone. I'll need the recharge to be ready for 8 hours on the show floor tomorrow.