Let’s say that we are defining a U.S. recession trend as 3 consecutive quarters of GDP decline. The GDP figures below would satisfy this definition. However, these figures are statistics taken from a population with zero sampling error. Q3, as it turns out, is NOT statistically significantly different from Q1. Does that mean the definition of recession is not satisfied?

Q1 – 0.8%

Q2 – 0.7%

Q3 – 0.6%


It doesn't mean the definition is not satisfied. Apparently, the definition you provided refers just to the observed quantities. If the definition were more involved, e.g. if it were to take statistical significance into account, then it would have specify a significance threshold, like 5% p-value.

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