The Wall Street Journal’s Spencer Jakab pointed out anything engaging the other day: There’s been a rise in Google searches on the term “recession”.
It’s easy to know why. Problems that tariffs will drive inflation have sent customer confidence tumbling. The University of Michigan’s Index of Consumer Expectations fell 18 % in March from April and 30 % from last November.
When customers ‘ trust falls, they commonly cut back on payments. That idea has economics lowering their economic growth projections and seeing higher chances of a downturn. Researchers cite recession fears as a main cause of the new stock-market fall.
In all this crisis talk that lurks a problem most of the observers take for granted. What is a recession, simply, and how will we recognize when we’re in one?
Economics favor the description used by the non-partisan National Bureau of Economic Research. A recession, NBER said, is” a considerable decline in economic activity spread across the economy, lasting more than a few months, usually obvious in real GDP, true income, employment, industrial production, and wholesale-retail sales”.
Many commentators who aren’t economists rely on a simpler ( though somewhat misleading ) rule of thumb: A recession is two consecutive quarters of declining GDP.
For the man on the street, there’s Ronald Reagan’s popular description:” Recession is when your roommate loses his job. Unhappiness is when you lose yours”.
Each of these concepts has difficulties.
The NBER description may be the standard one, but NBER normally calls downturns after they’ve ended. Those calling are important for financial researchers, but not to state politicians responsible for responding to recessions.
The two-quarters explanation simply looks at one changing, GDP, and over a firm time frame. A recession may be afoot after four weeks of sharply rising poverty and high falling retail sales. This definition doesn’t catch it.
The Reagan description is genteel and cute, but evidently one individual losing a job does not create a recession. In a dynamic market with more than 160 million jobholders, several tens of thousands of work are lost every time– also during times when the economy is expanding.
But the Reagan definition does illustrate an important point: Politicians are far more vulnerable to employment than to industrial output, financial sales or the other variables NBER looks at.
However, if unusually large numbers of Americans are losing their jobs and the unemployment rate is soaring, officials won’t care that the pain isn’t” stretched across the market” or hasn’t gone on for two consecutive quarters. They’ll want to do something.
By viewing the position from the personal American’s perspective, the Reagan definition even indirectly recognizes that sectors of the economy can be in recession – or feel like they’re in recession– even if the economy as a whole isn’t.
Get the housing market. Figures of home selling and pending household income published recently by Well Fargo economics show sales falling abruptly between 2022 and 2023 to extremely low levels and bumping along the base since.
High interest rates deter would-be home buyers and “lock in” owners who have mortgages at the much lower rates available in years past. They aren’t selling even if they want to move because a new mortgage would saddle them with higher monthly payments.
And then there’s agriculture. From 2022 to 2024, farm income fell sharply. USDA is forecasting a$ 41 billion increase in farm income in 2025, but that’s thanks to government payments. USDA expects cash receipts to fall another$ 1.8 billion.
Just as the national economy has many sectors, some of which are doing well and some poorly, so too does the agricultural economy. The definition of an agricultural recession is murky. But if it’s defined as a multi-year period of low crop prices, higher costs and paltry farm income, the row crop sector is in recession. Some other ag sectors are doing somewhat better.
Both the ag economy and the national economy are bracing for a trade war. The national economy might grow slower, but avoid a downturn. Many of the economists who’ve upped their recession odds still put those odds below 50 %.
The ag economy is more dependent on exports and therefore more vulnerable to the expected retaliation.
Ag exports have been growing slowly in recent years after falling sharply between 2022 and 2023.
Should they take another plunge in a trade war, will government payments increase enough to compensate? If not, we could see an agricultural economy that no one will doubt is in recession.
Former longtime Wall Street Journal Asia correspondent and editor , Urban Lehner , is editor emeritus of DTN/The Progressive Farmer.
This , article,  , originally published on April 3 by the latter news organization and now republished by Asia Times with permission, is © Copyright 2025 DTN/The Progressive Farmer. All rights reserved. Follow , Urban Lehner , on , X @urbanize ,