By Nathalie Voit

A widely used Federal Reserve metric signaled that the U.S. economy could contract for the second time this year, potentially triggering a recession.

The Atlanta Fed’s GDPNow tracker, considered a running estimate of real GDP growth, stands at just 0.9% for the second quarter ending on June 30 after being downwardly revised from 1.3% on June 8. The news comes after real GDP fell at an annualized rate of 1.5% in the year’s first three months.

If GDP growth were to finish the quarter off in negative territory, this would meet the basic unofficial criteria for a recession. According to the financial press, two consecutive quarters of declining GDP is considered a recession. However, the National Bureau of Economic Research (NBER), which is officially in charge of announcing when recessions start and stop, has yet to sound the alarm.

Contrary to popular opinion, the NBER defines a recession as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.”

“Most of the recessions identified by our procedures do consist of two or more consecutive quarters of declining real GDP, but not all of them,” the NBER says on its website. “There are several reasons. First, we do not identify economic activity solely with real GDP but consider a range of indicators. Second, we consider the depth of the decline in economic activity.”

Although real GDP is regarded as the strongest measure, the NBER considers four other economic indicators to determine whether the country is in trouble: real income, employment, industrial production, and wholesale-retail sales. When these indicators decline, so will GDP.

Nonetheless, there has never been a period of double-quarter contraction that did not entail a recession, according to economic data dating back to 1947. Instead, the NBER says there have been recessions that saw just one-quarter of negative growth–like the recession in February 2020.