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The White House Council of Economic Advisers said on July 21 that while the previous estimate of gross domestic product on Friday was negative, it still “does not appear” to indicate that the country is in recession.
A recession marks two consecutive quarters of negative economic growth.
The Council of Economic Advisers said in a blog post that two consecutive fourth-quarter GDP declines do not mean the country is in recession.
“What is a recession? While some say two consecutive quarters of falling real GDP is a recession, that’s not the official definition or the way economists evaluate the state of the business cycle,” the blog post says.
Treasury Secretary Janet Yellen played down fears of an economic ‘slow’ but recovery.
President Joe Biden speaks about the economy and the special financial assistance program of the America’s Rescue Plan, the final rule implementing multiemployer retirement plans at Max S. Hayes High School in Cleveland, Ohio, July 6, 2022. ((Photo by Saul Loeb/AFP via Getty Images) / Getty Images)
Citing figures from the National Bureau of Economic Research, the Post said their “recession indicator variables” “showed strong growth in the U.S. economy since the pandemic began and continued to expand in the first half of this year.”
Even though the Bureau of Economic Analysis’ second quarter GDP forecast shows a negative number, the blog says the country is not in recession.
“Based on these data, the decline in GDP in the first quarter of this year – despite being followed by another decline in GDP in the second quarter – indicates an economic recession,” he wrote.
Meanwhile, inflation hit a new 40-year high in June, reaching 9.1 percent.
On NBC News’ “Meet the Press,” Treasury Secretary Janet Yellen said the economy is not in recession, but in a “period of transition” with “slowing growth.”
Since the Biden administration called inflation ‘transitory’, the US has seen 13 straight months of higher spending.
Treasury Secretary Janet Yellen testifies before the House Ways and Means Committee on Capitol Hill, June 8, 2022. (AP Photo/Jose Luis Magaga, File/AP Newsroom)
“The labor market is extremely strong right now,” Yellen said. “This is not an economic recession, but we are in a transition period where growth is slowing down. And this is necessary and appropriate, and we need to grow at a steady and continuous pace. So, there is a slowdown. , and businesses can see that and this is appropriate, people now work Because they have and we have a strong job market.
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Will O’Grady, a spokesman for the Republican National Committee, told Fox Business that “redefining” what constitutes a recession won’t fix some of the legislative actions Democrats have taken.
“Joe Biden turned his recovery into a failure. Redefining the term doesn’t fix the fact that Democrats wasted $1.9 trillion, at a huge cost to Americans,” O’Grady said.
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