On 28 July 2022, US figures showed the economy had shrunk for a second quarter in a row. That meets a simple rule of thumb for a recession: two falling quarters in a row. Yet no US recession was ever dated for 2022.
In the US, a committee of economists at the National Bureau of Economic Research (NBER) dates recessions from a wide set of data. Revised figures now show only one falling quarter in 2022. Here is what a recession is, who decides and which indicators give warning.
What is a recession? A recession is a significant fall in economic activity that spreads across the economy and lasts more than a few months. In the US, the National Bureau of Economic Research (NBER) sets the official dates, using monthly data on jobs, incomes, spending and output.
Two quarters in a row of falling Gross Domestic Product (GDP) is a rule of thumb. The UK's statistics office uses it. The NBER does not.
The US has had 12 recessions since 1948. They lasted 10.3 months on average. The shortest was 2 months, in 2020. The longest was 18 months, from 2007 to 2009.
The NBER dates recessions after the fact. On 8 June 2020, it named February 2020 as the month activity peaked before the last recession. That was four months later.
What is a recession?
The NBER defines a recession as "a significant decline in economic activity that is spread across the economy and lasts more than a few months". The NBER is a private, non-profit research group.
Its Business Cycle Dating Committee picks two months. The peak is the month activity was highest. The trough is the month it hit bottom. The recession is the months after the peak, up to and including the trough.
The committee weighs three things:
Depth: how far activity falls.
Diffusion: how widely the fall spreads across industries.
Duration: how long it lasts.
Very deep weakness on one test can make up for less on another.
The committee looks at monthly data, mostly "real", which means adjusted for inflation. The main series are:
Real personal income, leaving out government payments such as benefits.
Nonfarm Payrolls, the monthly count of jobs at US employers outside farming.
Employment from the household survey, a monthly survey of US homes.
Real consumer spending.
Manufacturing and trade sales.
Industrial production.
Recession vs depression
A depression is a very deep and long recession. The NBER publishes no separate dates for depressions. Its dates show the Great Depression as a contraction from August 1929 to March 1933, lasting 43 months.
The scale is different. US real GDP fell 26.3% from 1929 to 1933. In the 2007 to 2009 recession, real GDP fell 3.8% from peak to trough.
US recessions since 1948
Source: NBER; YX Insights
The chart shows each US recession since 1948, from peak to trough. There have been 12, with a mean length of 10.3 months and a median of 10 months.
The longest was the 2007 to 2009 recession, at 18 months. The shortest was 2020, at 2 months, during the pandemic lockdowns. From December 1948 to September 2026, the US spent 13.3% of all months in recession.
An expansion is the stretch from one trough to the next peak. The longest on record ran 128 months, from June 2009 to February 2020.
Two falling quarters vs the NBER
GDP is the value of everything an economy produces. Real GDP strips out price rises. We explain both in What Is GDP?.
Two quarters of falling real GDP in a row is a simple rule of thumb for a recession. The UK uses that rule. Its Office for National Statistics (ONS) calls two quarters of negative growth a technical recession.
The NBER gives several reasons for not using it. It looks at a range of indicators, never GDP alone. It looks for a significant decline, not any decline.
The NBER also uses monthly data, so it can date a recession to the month. It gives equal weight to Gross Domestic Income, which measures the same economy from incomes.
The rule can miss real recessions too. The 2001 recession lasted 8 months. In today's data, real GDP fell in two quarters of 2001, but not two in a row.
The 2022 case: two falling quarters, no recession
Source: FRED and ALFRED (A191RL1Q225SBEA); YX Insights
The chart shows real GDP growth in the first half of 2022. Each quarter's change is scaled up to a yearly pace, called the annual rate.
The orange bars are the figures published on 28 July 2022. They showed −1.6% in the first quarter and −0.9% in the second. By the rule of thumb, that was a recession.
The blue bars are the same quarters as published on 30 September 2026, after several rounds of revisions. The first quarter is now −1.0%. The second quarter is now +0.6%, growth. The second quarter turned positive in the revision of 26 September 2024.
The monthly data never showed a broad decline. From December 2021 to June 2022, US employers added 2.5 million jobs. The Unemployment Rate fell from 3.9% to 3.6%.
We cover both measures in What Are Nonfarm Payrolls? and What Is the Unemployment Rate?.
Recession indicators: the Sahm Rule and the yield curve
The NBER's dates arrive late. It named December 2007 as a peak on 1 December 2008, 12 months on. Two indicators aim to spot a recession sooner.
The Sahm Rule was set out by economist Claudia Sahm in a 2019 paper for the Hamilton Project. It signals a recession when the three-month average of the Unemployment Rate rises 0.50 percentage points or more above its low of the past 12 months.
FRED, the St. Louis Fed's data site, publishes it as the Sahm Recession Indicator. It uses the jobs figures as first released.
Source: FRED (SAHMREALTIME, USREC); YX Insights
The chart shows the indicator since December 1959, with recessions shaded. The 2020 high, 9.50 in June 2020, runs off the scale.
The indicator crossed 0.50 in each of the nine recessions since 1960. It usually did so a few months after the recession had begun: the median was 4 months after the peak.
It also crossed twice with no recession. The first time was November 1976. The second was July 2024, when it reached 0.53. In September 2026, it stood at 0.00.
The second indicator is the yield curve. It plots the yields on US government debt from the shortest loans to the longest. The spread here is the 10-year yield minus the 3-month yield. When it drops below zero, the curve is inverted.
The spread inverted before each of the four recessions that began after 1982. It was also inverted from October 2022 to December 2024, with no recession so far. On 6 October 2026, it was +1.06 percentage points. We explain the curve in What Is the Yield Curve?.
How to read recession news
A few points help:
"Technical recession" means the GDP rule only. In the US, check whether the NBER has spoken. As of 7 October 2026, its last trough was April 2020, with no recession dated since.
Expect revisions. The 2022 case shows that first GDP figures can change sign.
Read several indicators together. Real GDP grew at an annual rate of 2.2% in the second quarter of 2026. The Sahm Recession Indicator was 0.00 in September 2026, below its 0.50 signal. The yield curve spread was +1.06 percentage points, above zero.
Note the next date. The first estimate of third-quarter 2026 GDP is due on 29 October.
A recession is a broad, lasting fall in activity across the economy. In the US, the NBER decides, from monthly data and after the fact. The two-falling-quarters test is only a rule of thumb, as 2022 showed.
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Common questions about recessions
Who decides if the US is in a recession?
The Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) decides. It is a private, non-profit research group. The committee studies monthly data on jobs, incomes, spending and output. It announces dates months after the fact. It named February 2020 as the peak before the last recession on 8 June 2020.
Is a recession two quarters of negative GDP?
Only as a rule of thumb. The UK statistics office calls two falling quarters a technical recession. The US official dates come from the NBER, which uses many monthly indicators. In 2022, the first US figures showed two falling quarters, but no recession was dated. Revised figures show only one falling quarter.
What is the difference between a recession and a depression?
A depression is a very deep and long recession, with no official threshold. The Great Depression lasted 43 months, from August 1929 to March 1933, while US real GDP fell 26.3% from 1929 to 1933. In the 2007 to 2009 recession, real GDP fell 3.8% over 18 months.
How long do recessions last?
US recessions since 1948 have lasted 10.3 months on average, according to the NBER's dates. The median is 10 months. The shortest was 2 months, in 2020. The longest was 18 months, from December 2007 to June 2009. Expansions, the stretches between recessions, have run longer. The record is 128 months, ending in February 2020.
What happens to interest rates in a recession?
Interest rates usually fall in a recession, because the Federal Reserve cuts its policy rate. The Effective Fed Funds Rate is what banks charge each other for overnight loans. In each of the 10 US recessions since 1957, it was lower at the trough than at the peak. From 2007 to 2009, it fell from 4.24% to 0.21%. We cover its history in What Is the Fed Funds Rate?.
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