joining us now is the president and ceo of the nber. jim, under the radar nber, did you ever think there would be so many articles and so much demand for what you have to say >> i will confess, sara, that i have been sprurprised by all th attention the last couple of weeks, absolutely. >> so tell us, how do you define a recession? >> the nber has a tradition of defining recession, peaks in economic activity and recessions which goes back nearly 100 years which goes back to leslie mitchell and eric byrnes and it focuses on finding periods of time when a decline in economic activity is broadly dispersed across the economy and lasts for a period of at least several months so it's depth, duration and difusion are the three features of a downturn that the nber would look at in order to find periods that would be categorized as recessions. >> so is that what we're looking at right now >> the way the committee will try to assess data as it emerges is for those attributes. the committee doesn't rely on the two quarters of declining gdp definiti

julia boorstin up next we will talk to the chair of the national bureau of economic research, nber. remember the group charged with designating when a recession actually begins. for his read on the current state of the u.s. economy. you're watching "closing bell" on cnbc, up 142 on the dow >>> new data out today showing china's economic activity slowed across the board in july, prompting an unexpected rate cut. pretty different picture than what we've seen in the u.s most recently with cpi and ppi heading in the right direction and the labor market holding very strong. joining us now is john lipsky, the chair of the national bureau of economic research, who was also the former acting managing director of the imf. it's good to see you again, john welcome back >> thanks, sara. nice to be here. >> i wanted to start with china because even though we knew that china's been in lockdown mode and the economy's been weakening i think the news still came as a surprise and we're seeing the reaction in commodities markets and investors who typically cheer rate cuts and stimulus from central ban

>> people don't wait to hear from the media or the nber whether they're in a recession.e's paychecks is going, you know, is not going as far as it used to, and that is true, they're going to think this is a recession, they're going to think this is a bad economy and hold the party in power accountable. this administration i think is consistently played the politics of the economy badly. first, in denying that inflation was going to happen, denying it was going to stick around and now getting into this absurd definitional argument about whether we're in a recession or not. i think that is going to actually slightly compound the problem by making them also look out of touch. >> jonathan martin, the senate, let's look at the senate first of the two. how do the races look there? and this was supposed to be a favorable year for republicans. how is it turning out? >> the wind is blowing in their direction, as it often does in the first midterm of a president of the opposite party. but i think in senate races and gubernatorial races, candidates do still matter. they don't matte

so we're notnywherearhe 2010 tertory in terms o the neric ball. 2014hey w b in th nate a bught hse nbersto e higstevelsince 1928 athis point in 20, the generic balt was d plus 1.6. 2014 offers a cautionary note that these things can break late. >> we've got to go, but really quickly, one more data point along these lines. i'm saying we've got to go because dan keeps saying, joe, we've got to go. there is one more important data point. we've had two special elections over the past month or so in territory that donald trump won comfortably. and yet the republicans underperforming the 2020 numbers, which again, it just may be anecdotal but i look at election results leading into big elections and here are two c examples of republicans doing worse than you would expect. >> it was in the first district of minnesota last night. the bottom line is this is a special election. the republicans are going to win this thing by somewhere around five points. donald trump in 2020 won the district by ten. in 2016 he won it by 15. that's certainly off the trump margin. the republican spin on this is that

there is a body of economists at the nber that says that this is a very long kind of sustained period have never seen a recession with the unemployment rate at the lowest in our lifetimes which is 3.5%. with lots and lots of job openings. and so the signs on the ground are not that we're in recession. but what is undeniable is that lots and lots of companies are slowing hiring plans and you are seeing many signs of a slowdown, slowdown in spending by companies in certain areas, definitely retailers having a hard time kind of being whip sawed by not having enough inventory last year, stocking up, now trying to get rid of it very cheaply. so there are strains in the economy for sure, but on the other hand, more americans have jobs than almost anytime in our lifetime. maybe not the exact job that they want, but they do have jobs. and wages are rising again not at the pace of inflation recently, but at the most rapid pace in many, many years. and so that does not make it a recession. really the question is where we're heading and the nightmare for investors is that you have stagf stagflat

and so whether the nber decides that this is a recession or not, we certainly having a meaningful economic slowdown. have we priced that in is your question perhaps we have in certain sectors and industries again, i think you need to be thoughtful these flows that you're talking about are coming into the certain parts of the market. there are interested investors in the high valuation growth names. those less profitable or not at all profitable companies but i think that if we look at 2023, those aren't necessarily the ones that are going to have this v-shaped rebound. i think there is going to be tailwinds in terms of execution by management teams. i think overall growth will be a headwind if you're buying equities because you think we're going to have a v-shaped sharp recovery in the economy because the fed is going to pivot and there's going to be easy money, that's not where i would be investing but if you're looking out two to three years and you want to have earnings growth and some cash flow and benefit from that, then yes. bonds still have a ways to go. they're going to go back up

but recession is defined by others, defined by an institution called nber.t we know. this is the facts. this is what i'm listing out. we are dealing with such a strong labor market at the moment, the president when he walked in, the economy was in dire straits because of covid, because of what was happening, and because of how the last administration handled covid. he has created 9 million jobs since he's been in office. and so that matters. because we're seeing those strong -- that strong labor market, because we have a low unemployment at 3.6%, that tells us that we are -- that does not define what a recession is. but understanding that, you know, we are going through a transition, that what we're going through. we talk about that all the time, where it's going to be a little bit more stable, a little bit more steady. we're seeing the job creation every month go down a little bit, which is very important as we make that transition. but again, this is a president that's doing everything that he can to really meet the american people where they are, and if r

so much for joinin us >> thank you, sara >> kyle bass by the way as kyle mentioned it's up to the nber to determine the recession tomorrow on th show we will talk to the ceo james poterba who leads that organization, the national bureau of economic research. go through his checklist on what actually makes a recession sort of up for debate righ now. >>> up next insurance upstar lemonade got a pop early in th pandemic it's been on a downward slop ever since though. gaining some ground today. we'll talk to the company's ce about the stock's performanc and the closing of its new acquisition car insurance metr mile you're watching closing bell o cnbc we have turned higher here o the dow up 17. a few attempts earlier today we'll see if it sticks into th close. we'll be right back. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq esg is responsible invest

i think whether or not ultimately it's officially a recession declared by the nber at this stage in theame i think that is more academic than anything else. we're not sitting here with strong growth and debating are we getting a recession or a soft landing. we're in, we're in a landing. it is a question of longevity at this point i think more so than severity. charles: i agree with you a thousand percent. i think everybody in this countries it waiting for it to be time-stamped by a group of eight economists somewhere down the road. we're living it right now. liz ann, wish we had more time. hope to bring you back when the numbers come out you were talking about. thank you very much. >> good to see you. charles: individual investors are like deer in the headlights with all the federal reserve inflation talk. this is 52 mem bergs of the national association for business economics actually say they are not very confident that the fed can combat inflation and 21% say they're not confident at all. i want to bring in daily dirt nap editor jarrett. two part question, a, can the fed pull it off

end of 1990, 1991, found bottom of that recession, by the time the nber called it you would be up 49% about recession and think about investing. find stocks you want to own, you want to take advantage of and buy during this weakness. you heard it during the show, as scary as that may feel, that is the best way to get through this in terms of looking forward to your own personal prosperity. i have a question from james g. here in the audience. james? >> charles, i was just asking what is the best investment strategy of these times of high inflation? charles: you know, the book says tips which are treasury bonds, cash, short-term bonds, gold, commodities real estate. i would like to have some cash. at one point earlier this year i had my subscribers 45% cash because it is nimble. you can use it when you want to use it, even though you're losing purchasing power. commodities i think will come back. i think of course they had a huge run at beginning of the year. they're pulling back but i think they will go back up. in fact i think oil will go back to test the high. you want some exposure

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existential question, like if a tree falls in the forest >> there's no real official definition there's this nberor anything like that. it is in the eye of the beholder but traditionally, we've not said that there's a recession in an environment with flat and low unemployment and substantial job growth as you're pointing out. so that's where we're at >> two questions that come from that the first one is take a look at the rate structure that we've had m tin terms of where the mat is pricing we look at next year and they have cuts built in, and a lot of people say those are the markers for prinedicting a recession >> one thing about the market, they expect inflation to come down quite rapidly next year, and they've been wrong on this so far so i think the better bet is that it will take a while for inflation to come back to 2%, it won't be as rapid as what the market expects you know, whether there would be a recession or not, right now i think the second half will be stronger than the first half was. so a lot of the indicators will go back in the other direction of positive growth, and i think la

recession is defined, the nber determines a recession, the they have six indicators they look at at,inting to recession. the only one that's holding them back from declaring that we're in a recession, we are in a recession, probably a shallow recession like 2001, not a great depression, although if they make more policy errors we could go there, but the only thing that's holding us up is employment and employment is really held up by mythological data, called the birth, death ratio. bls comes out every week and saying says we're so far along in an economic expansion, there should be this many companies formed, this many companies die and therefore we have this many new jobs. did you count any of those jobs? did you look at the payroll taxes of any of those jobs? no, no, we just think that's how many jobs there are. that's just silly. dagen: sounds like the cdc, doesn't it? >> it does. dagen -- dagen: it's our money and our health. >> a great analogy d. dagen: put slips of paper in a bucket and shake them around and throw them in the air and whichever one we pick up first will be the