Whether US Is Heading for Recession or Just 'Detox', Downturns Are Costly

US Commerce Secretary Howard Lutnick says a recession would be "worth it" to get US President Donald Trump's economic policies in place, while Treasury Secretary Scott Bessent has spoken of a coming period of "detox" and Trump himself says the economy is in "transition."

- REUTERS

However it plays out, history shows recessions - should it come to that - are costly affairs: The pain is never spread equally, and the outcome - from the length and depth of the downturn to the speed and breadth of recovery - is unpredictable.

In general terms a recession is when the total output of an economy, called gross domestic product, declines in a meaningful way. One common rule of thumb is that when gross domestic product (GDP) contracts for two consecutive quarters, the country is in recession. But that doesn't really capture it.

The National Bureau of Economic Research's Business Cycle Dating Committee looks beyond GDP at things like unemployment, personal income excluding government benefits, consumer spending, and industrial production.