The White House has just redefined the word “recession” because, well, of course they did. A new GDP report is expected Thursday, which many experts anticipate will show growth declines for a second straight quarter.
Since the White House has just put out an updated definition, the Biden administration can plan on evading the r-word entirely. Or so it thinks.
“While some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle,” the White House wrote.
“Instead, both official determinations of recessions and economists’ assessment of economic activity are based on a holistic look at the data—including the labor market, consumer and business spending, industrial production, and incomes,” the blog post continued. “Based on these data, it is unlikely that the decline in GDP in the first quarter of this year—even if followed by another GDP decline in the second quarter—indicates a recession.”
As Treasury Secretary Janet Yellen said on Meet the Press Sunday morning: “A common definition of recession is two negative quarters of GDP growth.”
“Many economists expect second quarter GDP to be negative,” she continued. “First quarter GDP was negative.”
Per the Bureau of Economic Analysis, the “[GDP] decreased at an annual rate of 1.6 percent in the first quarter of 2022.” They also note that “In the fourth quarter of 2021, real GDP increased 6.9 percent.”
As many have speculated, this whole charade feels like a cheap attempt from the Biden administration to get ahead of some politically damaging news later this week.
Even Yellen, who admitted just recently that the Biden administration “was wrong” on inflation forecasts in the past, acknowledged that the standard definition for “recession” is a negative GDP report two quarters in a row. And that the US experienced a negative report in Q1.
Further emphasizing the disconnect between the White House and everyday Americans, Bloomberg reported earlier this month that “more than one-third of Americans believe the economy is now in a recession.”
Even though Yellen argues that while “we’re likely to see some slowing of job creation,” the US is not in a recession. Nor does she believe one will be inevitable.
Additionally, the Biden White House attempts to use unemployment numbers to offset the concerns about negative GDP growth. They state that “although the unemployment rate is not on the committee’s list, the fact that it has held at a historically low 3.6 percent in the past four months also has bearing on the recession question.”
It’s interesting to watch Biden and his administration claim and parrot one thing, while the majority of Americans are feeling and experiencing the total opposite.