The old media rule-of-thumb is that a recession occurs when the economy experiences two straight quarters of negative GDP growth. If that’s true, then we’re now only one quarter away from entering a possible recession, after yesterday’s somewhat surprise announcement that the economy actually contracted in Q1. And that was before the “Liberation Day” tariffs debacle in April. … But a recession isn’t officially a recession until the economists at our very own National Bureau of Economic Research, based in Cambridge, declare a recession. And a recession is not always a case of two consecutive quarters of negative GDP growth. Other factors play into what constitutes a recession. … And it certainly doesn’t feel like a recession right now, with the U.S. unemployment rate at only 4.2 percent and a state jobless rate of 4.4 percent. … We’ll get a key update on the labor market — and the economy as a whole – after tomorrow morning’s release of April jobs data.

Update – Not a good sign, via WSJ: “GM Expects Tariffs to Cost Up to $5 Billion in 2025, Slashes Outlook.” Also from the WSJ: “McDonald’s U.S. Sales Decline in Shaky Economy.”

Update II – The NYT on yesterday’s GDP report: “A Flashing Economic Warning and a Sharp Political Jolt.”

Update III — 5.2.25 — Good news, via Business Insider: “A hotter-than-expected jobs report shows US employment is holding strong as tariffs swirl.”