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Biden avoids saying “recession” when the economy plummets

President Biden will not say the “R word.”

No, not that “R-word” – “recession”.

Biden ducked the notion that the U.S. economy was shrinking for a second straight quarter in his first statement Thursday — after the White House insisted the long-accepted definition of a recession no longer applied.

“After last year’s historic economic growth — and the recovery of all the private sector jobs lost during the pandemic crisis — it comes as no surprise that the economy is slowing as the Federal Reserve acts to bring down inflation,” the president said in one written statement.

“But even as we face historic global challenges, we are on the right track and will come through this transition stronger and more confident.”

U.S. gross domestic product fell 0.9% in the second quarter of 2022 after falling 1.4% in the first quarter.

A man shops at a supermarket in New York on Wednesday, July 27, 2022.
Treasury Secretary Janet Yellen claimed a recession was needed for the economy to grow at a “steady and sustainable pace”.
AP Photo/Andres Kudacki
President Joe Biden speaks to reporters after meeting with Saudi Crown Prince Mohammed bin Salman at the Waldorf Astoria Jeddah Qasr Al Sharq hotel on Friday, July 15, 2022, in Jeddah, Saudi Arabia.
President Biden claims the US is “on track” after the country’s gross domestic product fell in the second quarter.
AP Photo/Evan Vucci, file

Biden administration officials tried to forestall the expected blow, arguing that the economy is merely in a transitional period, not a recession.

White House Economist Brian Deese insisted Tuesday that “two negative quarters of GDP growth is not the technical definition of a recession.” But Republicans were quick to point to comments by Deese in 2008, who said at the time that “economists have a technical definition of recession as being two consecutive quarters of negative growth.”

“This is not an economy that is in recession, but we are in a period of transition where growth is slowing down,” Treasury Secretary Janet Yellen said on Sunday. “And that is necessary and appropriate, and we must grow at a steady and sustainable pace.”

However, journalists at White House briefings pointed out that last year Biden and his economics team had confidently but incorrectly predicted that rising inflation would be temporary.

The US economy is experiencing the worst inflation since 1981. The state consumer price index for June showed an average annual increase in the price of goods and services of 9.1%. As a result, the Federal Reserve is raising interest rates.

In his statement, Biden emphasized the positive aspects of the economy.

“Our job market remains historically strong, with an unemployment rate of 3.6% and more than 1 million jobs created in the second quarter alone. Consumer spending continues to rise,” Biden said. “Earlier this week I met with the Chairman of SK Group of Korea, just one of the companies that has invested more than $200 billion in American manufacturing since I took office, fueling an historic recovery in American manufacturing.”

Biden added: “My economic plan focuses on bringing down inflation without giving up any economic gains that we have made. Congress has an historic opportunity to do so by passing the CHIPS and Science Act and the Inflation Reduction Act without delay.”

The CHIPS bill passed the Senate on Wednesday, authorizing $280 billion in new spending on computer chip development. Senate Majority Leader Chuck Schumer (D-NY) and centrist Sen. Joe Manchin (D-WV) later announced plans to dust off a stalled budget ballot bill that would earmark $369 billion for environmental programs and $64 billion for dollars on federal subsidies for health insurance buyers, offset by projected $739 billion in tax increases for wealthier people and businesses.

Republicans accuse Democrats of fueling inflation with government spending. A study released in late March by researchers at the Federal Reserve Bank of San Francisco says about 3 percentage points of U.S. inflation in the last quarter of 2021 — or about half at the time — could have been caused by government spending during the COVID-19 -Pandemic, including Biden’s $1.9 trillion American Rescue Plan Act.

“This is Joe Biden’s recession,” Republican National Committee chair Ronna Romney McDaniel said Thursday. “Biden can lie and deflect blame all he wants, but that won’t ease the pain Americans feel every time they fill up their gas tanks, go grocery shopping, review their retirement plans, or balance their budgets. Biden and the Democrats are responsible for our shrinking economy and they are only trying to make it worse.”

https://nypost.com/2022/07/28/biden-avoids-saying-recession-as-economy-dips/ Biden avoids saying “recession” when the economy plummets

JACLYN DIAZ

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