EXPLAINER: How do we know when a recession has begun?

WASHINGTON — The Federal Reserve sent a sobering message Wednesday after it announced its latest big interest rate hike: It plans to keep raising rates as long as it takes to conquer the worst inflation bout in decades — even at the risk of causing a recession in the process. Given the strength of the job market — the unemployment rate is still an exceedingly low 3.7%, with plentiful job openings — most economists say a recession seems months away, at least. The economy’s direction has confounded the Fed’s policymakers and many private economists since growth screeched to a halt in March 2020 as COVID-19 struck and 20 million Americans were suddenly thrown out of work. Chair Jerome Powell is aiming for a “soft landing,” in which the economy weakens enough to slow hiring and wage growth without causing a recession and brings inflation back to the Fed’s 2% target. Yet on Wednesday, he made clear that the Fed will keep raising rates, even amid a weakening economy that could slide into a recession, if that’s what’s needed to tame inflation.