On my Essays page I have a link to the then ANZ economist Saul Eslake post called “The Truth about Recessions & Depressions”, it is almost required reading for this post.
The media and the public generally poorly define what is actual meant by a recession. The popular definition being two quarters of negative growth. Some call it a technical recession. This is an inaccurate definition.
Saul Eslake goes on to say:
Defining a recession as any period during which the unemployment rises by more than 1½ percentage points in 12 months accurately identifies all of the designated recessions in the US since 1945, without giving any ‘false signals’.
This rule also accurately delineates the five genuine recessions Australia has had in the last 50 years (in 1961, 1974-75, 1982-83 and 1990-91) without giving any ‘false signals’ – unlike the ‘consecutive quarters of negative GDP growth’ rule of thumb.
The unemployment rate for July 2008 was 4.3% according to statistics found on the Reserve Bank of Australia website.
According to the ABC, the unemployment rate for July this year is listed as 5.8%
Australia has, in fact, been in recession since March using the unemployment figures.