The Biden White House on Tuesday played defense before Thursday’s much-anticipated reading on U.S. gross domestic product, which is expected to show a drop for the second quarter in a row.
Rarely has GDP shrunk for two straight quarters without a recession being declared, but the organization responsible for making that call takes into account other factors as well, such as the health of the labor market.
So Biden administration officials have made an effort to make that clear.
“As Secretary Yellen said on Sunday, two negative quarters of GDP growth is not the technical definition of recession. It’s not the definition that economists have traditionally relied on,” said top White House economic adviser Brian Deese during a press briefing on Tuesday, referring to remarks over the weekend by Janet Yellen, head of the Treasury Department.
Deese, director of the National Economic Council, also said the administration has a goal of “transitioning from a historically strong recovery into a period of more stable and steady growth.”
“The totality of the economic data is consistent with that type of transition and is not consistent with a recession,” he added.
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Republicans are widely expected to score wins in this November’s midterm elections, thanks in large part to Americans’ frustrations with raging inflation that’s hitting the U.S. economy.
High prices for essentials and other economic problems are helping to keep President Joe Biden’s approval ratings low — and providing talking points for the GOP to use against Biden and his fellow Democrats.
On Tuesday, Republicans on the House Ways and Means Committee said in a news release that the Biden administration is “now redefining recession and downplaying the red flags in the economy,” saying it’s a “rebrand” and the “latest attempt to deny the cruel economy they’ve created.”
DJIA,
closed lower Tuesday, as investors digested a profit warning from Walmart
WMT,
ahead of the Federal Reserve’s decision on interest-rate hikes aimed at curbing inflation.
Investors also assessed a warning from the International Monetary Fund, which said the world “may soon be teetering on the edge of a global recession.”
