with june seeing an inflation rate of 91 percent the highest its been since the 1980s an average trip to the grocery store hasnt felt so average as the price of essential goods has been rapidly increasing so too has talk of a recession however the signals seem to be mixed while high inflation and a falling gross domestic product (gdp) seem to indicate a weakening economy the us job market has shown no signs of slowing down julys unemployment rate fell to 35 percent marking the first return to pre-pandemic rates the conflicting economic indicators have sparked debate regarding whether or not the us is currently in a recession but what defines a recession anyway the makings of a recessionput simply a recession is characterized by a decline in economic activity many factors go into formally determining a recession; however according to economics professor dennis jansen theres also an unofficial definition used more generally by the public the rule of thumb definition that the press and many commentators use is two consecutive quarters of negative real gdp growth jansen said and weve had that gdp is a measure of the monetary value of all the goods and services produced in a country in short its an indicator of the overall health of the economy this year gdp has fallen for the second quarter in a row the first quarter dropping 19 percent and the second 09 percent but the rule of thumb is just that its a rule of thumb jansen added the only official arbiter of a recession is the national bureau of economic research or the nber the nber is a private non-partisan organization that houses the business cycle dating committee a team of eight prestigious economists who track data related to the ups downs and plateaus of our business cycles the committees official definition of a recession reads a significant decline in economic activity that is spread across the country and lasts more than a few months however due to their extensive processes of analyzing data and determining a significant decline official statements usually arent released until months after the fact for example jansen noted that it took the team over a year to formally declare february to april of 2020 a recession it takes them a long time to act jansen said were going to wait a long time to hear whether we officially have a recession or not which is sort of why people like the rule of thumb so whats going on in the economy right nowalthough the nbers definition of a recession doesnt explicitly mention the job market its clear that the current unemployment rate is not consistent with a standard recession usually in a recession some bad things happen to the economy and then we have a cycle where the labor market is getting weaker unemployment is rising and gdp is falling all at the same time thats the typical recession jansen said however job creation is continuing to trend upward as 528 000 jobs were added to payrolls in july the labor market shows no sign of a recession or very little jansen noted marking a stark contrast to the implications of our inflation rate however the us is not the only country experiencing price increases jansen shared that in part some economists attribute our inflation to an excess of covid-19 stimulus payments distributed that was the story a year ago in the summer and in the fall jansen said more recently the inflation rates in some european countries have gotten close to or even above whats going on in the us jansen shared that the inflation seen around the world may be a result of supply chain disruptions stemming from the war in ukraine and tight covid restrictions in china regardless of the causes its clear that inflation is currently a widespread concern if every central bank in the world is trying to slow economic activity you have a much stronger impact on every country jansen noted the misnomer of the inflation reduction actthe inflation reduction act was recently signed into law by president biden but is more closely aligned with addressing climate than inflation jansen noted that the act is estimated to have almost no impact on inflation he pointed to a few widely known apolitical models that back this up: the penn-wharton budget model and the tax foundation they estimate that the inflation reduction act will very slightly increase inflation until 2024 and then very slightly decrease inflation after that the estimates of this increase or decrease are so small that its actually statistically insignificant jansen explained basically its going to have no effect on inflation moving forward and keeping upas the state of the economy continues to show mixed signals its crucial to pay attention to whats going on to get started on keeping up with the economy jansen suggested engaging with online newspapers or magazines that deal with economic matters such as the wall street journal cnbc and the economist for students his biggest piece of advice is to take an economics class sooner rather than later inflation is like a hidden tax jansen said it makes planning quite difficult and things hard to figure out but its important to at least be aware these things are happening