Growth recession
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The term Growth Recession indicates economic growth so low that it creates net unemployment. The term was created by Dr. Solomon Fabricant (New York University, National Bureau of Economic Research)[1] and is recognized and cited more recently by business economists. Note that the term also has slightly different secondary meanings including a more general one that growth is below potential. However, the more specific meaning indicates the growth weak and insufficient to provide jobs for those entering the labor market (see the Hoisington and Hunt reference). There may also be a third meaning referring to growth in which more jobs are actually being destroyed than created. In all cases the term indicates, Real GDP is expanding (slowly) but with job contraction, so the economy behaves or feels in many ways like a recession.
A former Group Managing Director at Global Insight who is now at the Bureau of Economic Analysis uses the phrase in this quote:
- My feeling at the time (2002-2003) was we had a recession followed by a growth recession till 03. That’s what I showed on those Global Insight recession/growth recession charts. Mike Nemeira (Chief Economist, International Council of Shopping Centers) a better expert than I am, and I debated this. He thought there was an argument for a quick full recovery then a lapse into a growth recession. There is no agreed standard for growth recession. But I would say while it looked stronger for a couple quarters, it wasn’t real strong.
Soft landings tend to also be growth recessions but not always. If economic growth in the economy is slowing to such a point that establishment payroll growth contracts, then the soft landing is so soft it has crossed over into a Growth Recession. Both Soft Landings in the mid 1980's and 1990's qualify as for several months employment did contract. Two months in 1995 and one month in 1986.
Jobless recovery, is another similar term. All jobless recoveries are by definition also growth recessions, however not all growth recessions are jobless recoveries because a growth recession can occur at any point in an economic cycle, and a jobless recovery only refers to the period immediately after a recession ends.
