As the ceaseless recession talk continues, the language creep continues. Does it really matter whether it’s a “recession” or a “slowdown”?
“It’s so much about semantics,” Burnett said on the February 28 NBC “Today” show when host Matt Lauer asked about the difference between recession and economic slowdown. “What word do you use to describe the situation? I think whether you say ‘recession’ or ‘economic slowdown’ isn’t so important.”
But when it comes to economic growth, that “semantic” difference is actually the difference between an economy in positive or negative territory.
A slowdown is characterized by slowed economic growth, but growth nonetheless. A recession is often defined as two fiscal quarters – six months – of negative growth.
And talk isn’t cheap – as Reuters reported February 26, words about the economy matter.
“Fear among U.S. consumers and businesses that the world's richest economy could go into a recession, or may already be in one, could help push the economy over the edge and bring on an even deeper, longer downturn,” wrote Joanne Morrison. She added that “many experts wonder if all the talk may add to the tendency of people to dampen their economic activity and spend less.”
In spite of the media’s obsession with reporting that the U.S. economy is already in a recession, there’s no way to know for sure until well after it’s begun. Lauer asked for anecdotal “evidence” instead.
Burnett obliged by pointing out that people in big cities might walk instead of take taxis and go out to eat at less-fancy restaurants.
“You can see people, for example saying, in New York City or big cities, ‘I’ll walk instead of take a taxi,’” Burnett said. “I was talking to some restaurant CEOs yesterday, CEO of Little Caesar’s pizza … he says, ‘Look, I’m actually benefiting because people don’t want to go out to expensive dinners.’”
“People are trying to cut back,” Burnett said. “Maybe they’ll go shopping at the mall but they won’t add on that dinner on top.”