Greenspan Had Real Economy. That's the Difference vs. Powell

The technical definition of recession is two consecutive quarters of negative GDP. At least that's what everyone says. If that was the case, what was the dot-com recession? According to the Bureau of Economic Analysis (BEA), the government agency which measures GDP, economic output in the US dipped in Q1 2001, rebounded in Q2, and then fell again in Q3. There were never two straight quarters of contraction.

In fact, if you go back a little further what you find is a more prolonged period where output was, shall we say, unstable. In GDP's terms, we can find it already in the third quarter of 2000 – when the S&P 500 was still reaching for its then-record top. In that quarter, GDP shockingly declined to just +0.5%. It then rebounded in Q4 2000, but “only” to +2.5%.