Worst Recession Since the 1970’s?

David Rosenberg and Sudeep Reddy are worried about how bad the current slowdown is going to get:

The mid-1970s recession “not only saw a sharp and sustained rise in food and energy prices, as is the case today, but also saw a very similar consumer balance sheet squeeze from a simultaneous deflation in residential real estate and equity assets, which never happened in the 2001 recession, the 1990-91 recession or the recessions of the early 1980s for that matter,” he writes. “The last time we had more than one quarter of outright contraction in the value of both asset classes on the household balance sheet was in the 1973-75 recession.”

But I thought we defined recessions in terms of negative real GDP growth. In 1974, real GDP fell during 3 of the 4 quarters. During the 1981-82 recession, we also saw real GDP fall during 3 out of 4 quarters. I would submit that the latter recession led to a larger GDP gap than the recession that Reddy describes as the worst – at least in my lifetime.