Biden administration redefines ‘recession’ ahead of Thursday’s GDP growth release;

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We’re not going to be in a recession, in my view,” Biden himself told reporters Monday.

In particular, officials are stressing to the public that though the coming report may show that gross domestic product shrank for the second consecutive quarter, the United States is not really entering a recession.

Officials say prolonged COVID-19 factors, coupled with the war in Ukraine , have muddied economic projections and claim that assessing the speed of the post-pandemic economic recovery means examining a variety of economic signals, not just total GDP.

“The National Bureau of Economic Research (NBER) Business Cycle Dating Committee — the official recession scorekeeper defines a recession as ‘a significant decline in economic activity that is spread across the economy and that lasts more than a few months.’

The variables the committee typically tracks include real personal income minus government transfers, employment, various forms of real consumer spending, and industrial production,” the post reads.

“Notably, there are no fixed rules or thresholds that trigger a determination of decline, although the committee does note that in recent decades, they have given more weight to real personal income less transfers and payroll employment.”

CEA goes on to argue that while “recession probabilities are never zero,” 2022’s economic data points beyond pure GDP size “are not indicating a downturn.”

“Looking ahead, we know that the U.S., along with the rest of the global economy, faces significant headwinds — and little relevant data are yet available on the third quarter,” CEA concludes.

“At the same, there is a good chance that the strength of the labor market and of consumer balance sheets help the economy transition from the rapid growth of the last year to steadier and more stable growth.”

Alfredo Ortiz, president and CEO of the Job Creators Network, called the Biden administration’s recession framing “a desperate attempt to prevent Biden from being labeled a recession president, which would further hurt Democrats’ chances in the midterm elections.”

http://politicalproces.net

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