Biden 'not concerned' about recession after US economy shrinks in first quarter of 2022
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President Biden on Thursday said he is "not concerned" about a recession in the immediate future, just hours after the Commerce Department announced that the U.S. economy shrank 1.4% at the beginning of 2022 — marking the worst quarter in two years.
Gross domestic product (GDP), the broadest measure of goods and services produced across the economy, shrank by 1.4% on an annualized basis in the three-month period from January through March, the Commerce Department said in its first reading of the data on Thursday.
US ECONOMY SHRANK 1.4% AT BEGINNING OF 2022, MARKING WORST QUARTER IN 2 YEARS
Refinitiv economists expected the report to show the economy had expanded by 1.1%. It marked the worst performance since the spring of 2020, when the U.S. economy was still deep in the throes of the COVID-induced recession.
In this photo provided by the New York Stock Exchange, specialist Stephen Naughton, right, works at his post on the floor. (Courtney Crow/New York Stock Exchange via AP / Associated Press)
When asked about how concerned he is about the prospect of a recession given the GDP report, the president said he is not.
"Well, I'm not concerned about recession," Biden said. "And I mean, you're always concerned about a recession, but the GDP, fell to 1.4%."
"But, here’s the deal," Biden continued. "We also had last quarter consumer spending and business investment and residential investment increased at significant rates, both for leisure as well as hard products."
The president also said unemployment is at its "lowest rate since 1970," and said "a record 4.5 million businesses were created last year."
"We're in a situation where we have a very different view than Senator Scott of Republicans that want to raise taxes on the middle class families and want to include half of small business owners," Biden said.
President Joe Biden signs the American Rescue Plan, a coronavirus relief package, in the Oval Office of the White House, March 11, 2021, in Washington. ((AP Photo/Andrew Harnik, File) / AP Newsroom)
The president was referring to a tax plan rolled out by Sen. Rick Scott, R-Fla., which the adviser said would "increase taxes on millions of middle class Americans and would phase out social security and Medicare."
Scott rolled out the plan in February, calling it the "11 Point Plan to Rescue America," which proposed raising income taxes on Americans.
"All Americans should pay some income tax to have skin in the game, even if a small amount," Scott wrote in the plan. "Currently over half of Americans pay no income tax."
But Senate Minority Leader Mitch McConnell, R-Ky., shut down the Scott proposal, saying last month that Republicans "will not have as part of our agenda a bill that raises taxes on half the American people and sunsets Social Security and Medicare within five years."
Senate Minority Leader Mitch McConnell, R-Ky., arrives at the Capitol in Washington, Wednesday, Oct. 6, 2021, as a showdown looms with Democrats over raising the debt limit. (AP Photo/J. Scott Applewhite / Associated Press)
A senior Republican source told Fox News that "income tax hikes are never part of the discussion when Republicans are in charge in Washington."
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The president said that there is "enormous growth in the country that was affected by everything from COVID [and more] that occurred along the way."
Biden, though, warned that you "always have to take a look" at the risk of recession.
"No one is predicting a recession now — they’re predicting the summer, predicting there may be a recession in 2023," Biden said.
"I am concerned about it," Biden said, referring to a recession next year.
"But I know one thing, that, you know, if our Republican friends are really interested in doing something about dealing with economic growth, they should help us continue to lower the deficit, which we've done last year, over $350 billion. They should be willing to work with us to have a tax code that is actually one that works and everybody pays their fair share. And they should be in a position where you shouldn't be raising taxes on middle class folks you should be raising taxes on people who everyone acknowledges … aren't paying their fair share," he said.
The GDP numbers come after inflation numbers released earlier this month revealed a new four-decade high in March as Russia's war on Ukraine fueled rapid price gains for oil and gas that wiped out the benefits of rising wages for most Americans.
The consumer price index rose 8.5% in March from a year ago, according to the Labor Department report released earlier this month, marking the fastest increase since January 1982 when inflation hit 8.4%. The CPI, which measures a bevy of goods ranging from gasoline and health care to groceries and rents, jumped 1.2% in the one-month period from January.
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FOX Business' Megan Henney contributed to this report.