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Since the latest growth numbers have come out, much ink has been spilled over the question of whether the economy is in a recession. Perhaps unsurprisingly, the Biden administration tried to get out ahead of Thursday’s release with a press statement noting that back-to-back quarters of negative growth doesn't necessarily mean a recession. Also predictably, Republicans strongly rebuked the idea, saying, “You can’t change reality by arguing over definitions.” Both sides of the debate will continue to play out, and both sides will continue to miss the point. Ultimately, it doesn’t matter very much whether growth goes up or down by 0.2 percent. What matters is the general trajectory of the economy. And on that front, the Biden track record is mixed at best.

With the travel-heavy Memorial Day weekend upon us, the fast-rising cost of gasoline is getting a lot of attention. Last week, gasoline rose above $4 a gallon in all fifty states. That’s the first time that has happened. Some are predicting gas could reach $6 a gallon this summer. If that comes to pass, the average American family could see a major impact on their budgets. (It might be noted as well, that the price of home heating oil has nearly doubled this year. If that continues, the economic impact next winter, especially in the northeast, where a high percentage of homes are heated by oil, will be considerable.) The threat of a recession is rising thanks to fuel shortages. Why has the price of gasoline risen so far so fast?

The media are abuzz these days about a purported “return to the 1970s.” Generally speaking, such chatter is not intended kindly, for many today would likely agree with the sardonic assessment of the Seventies made by the editors of New West magazine as that decade wound down: “It was the worst of times, it was the worst of times.” And not just because of the popularity of bell-bottom pants, platform shoes, and disco music. In the Seventies, we had problems far more troubling — more troubling even than the pop group ABBA. For starters, we saw a quadrupling of real oil prices between 1973 and 1979. We suffered high rates of both inflation and unemployment, which hitherto varied inversely, leading to the creation of the portmanteau “stagflation.

It’s odd to read headlines today saying that the UK has officially entered recession. We’ve known this for months: shops were closed, restaurants shuttered. You couldn’t get a cup of coffee or a haircut, offices were closed and millions furloughed. These were not normal times – but we knew that then, as we know it now. What we didn’t know was how far the economy had contracted, and how much this could be remedied by ending lockdown. The big news today, revealed by official figures released by the Office for National Statistics this morning, starts to answer this. It turns out that our economic hit was one of the hardest in Europe. UK GDP fell 20.

This is an economic horror show. According to YouGov, UK unemployment may have jumped five per cent in a matter of weeks. The consultancy CEBR estimates that global GDP may shrink by twice the rate seen in the Great Recession. This may be the worst hit to British people’s livelihoods since the Great Depression of the 1930s. Except one thing is different: this is a deliberate economic shutdown, made necessary to avoid a deeper, more human one. It isn’t that the economy is failing to work because the credit system has seized up as in 2008. We are actively contracting productive work in order to limit a tragedy. A recession it will be, but it is our choice in a time of acute crisis, demanding Herculean lifting and leadership by the state.

So, the Office of National Statistics has confirmed that the economy grew by 0.7 per cent in the last quarter of 2016, and by 1.8 per cent over the course of the year. Can we now please stop worrying about a post-Brexit recession and worry instead about an unsustainable consumer boom fed by interest rates which remain at panic levels. The bad news this morning is that the UK saving ratio – which is an estimate of the percentage of their income which households are saving – has fallen sharply from 5.3 per cent to 3.3 per cent. That takes it lower than it was a decade ago, just before the financial crash, and indeed is the lowest level measured in half a century. As Helen Nugent wrote here yesterday,  consumers are piling on credit card debt at the fastest rate in a decade.

So now we know. The recession that we were told would be ‘inevitable’ if we voted to leave the EU was not quite so inevitable after all. In fact, it hasn’t happened at all. The Office of National Statistics’ first estimate of economic growth for the third quarter has the economy growing by 0.5 per cent. Though this is just an early estimate and could well be revised – revision upwards or downwards of 0.1 to 0.2 per cent are perfectly normal – it is certainly not indicating a recession, which would be two quarters of negative growth. It is pretty much in line with how the economy was growing prior to the vote – a healthy annualised growth of around two per cent.

It’s now exactly one month until the EU referendum and the Treasury has marked the moment with another economic warning about the consequences of Brexit. The analysis out today claims that walking away from the European Union would kick-start a year-long recession. Brexit would also lower the country’s economic growth down by 3.6 per cent, according to the analysis. Although George Osborne must be nearing the point of running out of words to describe the economic ramifications of Brexit, in an article in the Daily Telegraph, Osborne and Cameron had this to say: ‘It is clear that there would be an immediate and profound shock to our economy. The analysis produced by the Treasury today shows that a vote to leave will push our economy into a recession that would knock 3.

After a healthy Irish lunch I drove blithely off through the streets of Roscrea, I think it was, to find that everywhere I went the populace was cheerfully waving at me, smiling, gesticulating or blowing horns. When I stopped to ask them why, I found that I had left on the roof of my car a wallet containing my entire worldly wealth, cash, credit cards and all. So paradoxically enjoyable was all this, so irresistibly amused and sympathetic were the bystanders, that I came to think of the event as a sort of leitmotif of my visit to Ireland. For whatever else has happened to the Republic, through it all the populace has remained fun, quick, laughing and kind to foolish visitors.

Dear David, From Q2 1979 to Q1 1981, quarterly real GDP fell in the UK by 5.5%. Unemployment rose rapidly, from 1.4m in Q2 1979 to 2.4m by the end of the recession, then continued rising through to its peak of 3.3m in 1984 – 12% of the workforce. Unemployment stayed above 3m for 51 straight months. This is the pattern economists expect in a serious recession. Unemployment rises, then stays persistently high, falling back only well into the recovery. It has also been the experience of much of the developed world since the Great Recession of 2008/09. So, for example, whereas US unemployment was below 5% in 2007, it rose to about 10% in 2010, falling back only gradually over several years thereafter. Similarly, in Spain unemployment rose from 8.4% in 2007 to 27% in 2013.