Biden fights talk of recession as key economic report looms
Facing a potentially grim report this week on the economy’s overall health, President Joe Biden wants to convince a skeptical public that the U.S. is not, in fact, heading into a recession.
The Commerce Department on Thursday will release new gross domestic product figures. Top forecasts such as the Atlanta Federal Reserve’s GDPNow are predicting that the figure will be negative for the second straight quarter — an informal signal that the country is stuck in a downturn. That’s political chum for Republicans in an election year.
The Biden administration is preemptively telling voters not to judge the economy by GDP or inflation alone. It says people should look at job gains, industrial output and other measures that point toward continued growth, even as Americans are downbeat in polls on the economy and Biden. The president maintains the economy is just cooling off after a sharp recovery from the 2020 recession caused by the coronavirus pandemic.
“We’re not going to be in a recession, in my view,” Biden said Monday. “My hope is we go from this rapid growth to steady growth.“
The specter of a recession could worsen what already appears to a bleak round of midterm elections this November, in which Biden’s Democrats could possibly lose control of the House and Senate. Biden’s team gave technical arguments in a report issued last week about how recessions depend on a dashboard of indicators and that only the non-governmental National Bureau of Economic Research can formally say when a downturn begins.
Republicans warn that the GDP report could show an economy in collapse, noting that Biden was also wrong on inflation as the consumer price index has jumped to a 40-year high despite assurances that the price increases would fade as the country moved past the pandemic.
“The White House published a whole explanation insisting that even if the new data suggest that our country is in recession, we actually won’t be,“Senate Republican Leader Mitch McConnell said in Monday in a speech to the Senate.
“The same people who said inflation wouldn’t happen,“he continued, “are now insisting we aren’t headed into a recession. Draw your own conclusions.”
The GDP report will likely be a “choose your own economy” kind of messaging in which voters will decide which numbers resonate with them the most. It’s GOP bluntness against Democratic nuance.
“You’ll have Republicans saying two consecutive quarters of negative growth — that’s a recession,” said Michael Strain, director of economic policy studies at the center-right American Enterprise Institute. “And you’ll have Democrats making this kind of hard to follow argument that we’re not in recession, but, yes, we are slowing down. If I had to bet, I would bet that the Republican argument gets more traction.”