President Joe Biden said the U.S. economy is “on the right path” on Thursday, hours after the Bureau of Economic Analysis announced that GDP had contracted for the second consecutive quarter, sending the U.S. into a recession.
GDP fell .9 percent in the second quarter from April to June, the Bureau of Economic Analysis announced Thursday. The traditional definition of a recession is two consecutive quarters of GDP contraction, though the Biden administration has in recent weeks tried to redefine the term along more subjective lines.
“Coming off of last year's historic economic growth – and regaining all the private sector jobs lost during the pandemic crisis – it's no surprise that the economy is slowing down as the Federal Reserve acts to bring down inflation. But even as we face historic global challenges, we are on the right path and we will come through this transition stronger and more secure,” Biden said in a statement after the GDP report was released.
“Our job market remains historically strong, with unemployment at 3.6% and more than 1 million jobs created in the second quarter alone,” Biden added, saying his “economic plan is focused on bringing inflation down.”
Meanwhile, inflation reached a 40-year high during the Biden administration, lowering real wages. Gas prices also reached record-breaking heights this summer, with the national average hitting $5 a gallon.
The Biden administration, including Biden’s national economic council director Brian Deese and White House press secretary Karine Jean-Pierre, have repeatedly denied the traditional definition of a recession, claiming it’s not the “technical” definition.
Deese has apparently flip-flopped over his own definition: In 20018 he said "the technical definition of a recession is two consecutive quarters of negative growth,” but when asked Sunday on CNN about the incoming GDP report said, "in terms of the technical definition, it's not a recession."
Deese also denied the U.S. was in a recession when asked about the new GDP numbers Thursday morning.
“In every prior recession in the U.S., we have lost jobs and over the course of this year we have gained 2.7 million jobs. The unemployment rate today in the United States is 3.6 percent. There’s only been a couple of months in the last decades that unemployment has been as low. We have a strong labor market. We have business that are continuing to invest. So we are in a transition, there’s no doubt,” Deese said on CNN.
“The economy is slowing and that is what most expected when coming off of an extremely strong and fast recovery last year. But all the indications we see right now are for an economy that’s showing extraordinary resilience in the face of global challenges. And the most important thing we can do right now… is to move on historic legislation that would lower costs and help encourage greater business investment over the long term,” he added.
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