Attempting to make sense of this recession right now is like peering though a thick fog. To fully understand its nature, we will need to wait until full data for second-quarter gross domestic product are published in July.
But the downturn’s basic anatomy is starting to become apparent, especially in the US, where the figures appear earlier than elsewhere. In many ways, this is just a much larger version of a normal recession.
One thing that seems different this time is that much of the slump in US consumer spending has been accompanied not by declining personal incomes but by a surge in savings, which suggests consumers may remain cautious during the recovery. US national accounts always estimate real gross domestic product using three complementary methods: value added, expenditures and income flows.