Gross domestic product fell .9 percent in the second quarter from April to June, the Bureau of Economic Analysis announced Thursday, contracting for the second quarter in a row and indicating the U.S. is in a recession.
GDP was expected to rise 0.3 percent in the second quarter, according to Dow Jones estimates.
The traditional definition of a recession is two consecutive quarters of GDP contraction. Anticipating the bad economic news, the Biden administration has tried in recent weeks to spin and redefine what a recession is, claiming that the U.S. has not yet hit a “technical recession,” according to the definition from the National Bureau of Economic Research (NBER).
The NBER’s definition states a recession is a “significant decline in economic activity that is spread across the economy and that lasts more than a few months.”
President Joe Biden’s National Economic Council Director, Brian Deese, said Sunday that the incoming GDP report was “inherently backward looking” and that “in terms of the technical definition, it’s not a recession.”
Brian Deese, yesterday: “Two negative quarters of GDP growth is not the technical definition of recession.”
Deese, 2008: “Economists have a technical definition of recession, which is two consecutive quarters of negative growth.” pic.twitter.com/MzVk7drq3v
— RNC Research (@RNCResearch) July 27, 2022
However, in 2008, Deese said “the technical definition of a recession is two consecutive quarters of negative growth.”
When confronted about Deese’s apparent change in definition, White House press secretary Karine Jean-Pierre said the “technical definition” is not correct.
“There are many factors, economic factors, and indicators to consider, and I will say that the textbook definition is not ‘two negative quarters of GDP,'” Jean-Pierre said, claiming that “we have a strong labor market” and “consumers that are very much investing.” While the labor market is tight, Jean-Pierre neglected to mention that real wages have declined over the last year, largely due to persistent high inflation.
The Conference Board Consumer Price Index, which reflects consumer’s business expectations for future months, declined in July for the third consecutive month, dropping 2.7 points since June and reaching the lowest level recorded since February 2021.
As recently as Monday, President Joe Biden has stressed that the U.S. will not go into a recession.
“We’re not going to be in a recession, in my view,” Biden said. “The employment rate is still one of the lowest we’ve had in history. It’s in the 3.6 [percent] area. We still find ourselves, the people, investing.”
“My hope is we go from this rapid growth to a steady growth. And so, we’ll see some coming down. But I don’t think we’re going to – God willing – I don’t think we’re going to see a recession,” he added.