White House says a second consecutive quarter of negative GDP 'unlikely' to be indicative of recession
A Republican National Committee spokesperson said that this further underscores how 'out of touch' President Biden is with Americans
'Word on Wall Street' panel with Ross Mayfield, Mike Murphy and Kevin Mahin takes a closer look on 'Mornings with Maria.'
The White House Council of Economic Advisers said on July 21 that even if Friday's advance estimate of the country's GDP is negative, it's still "unlikely" to be indicative that the country is in a recession.
Recessions refer to two consecutive quarters of negative economic growth.
In a blog post, the council of economic advisers says that two consecutive quarters of falling GDP doesn't mean the country is in a recession.
"What is a recession? 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 blog post states.
TREASURY SEC. JANET YELLEN ACKNOWLEDGES ECONOMIC ‘SLOWDOWN’ BUT DOWNPLAYS RECESSION FEARS
President Joe Biden speaks about the economy and the American Rescue Plan's protection of pension plans, at Max S. Hayes High School in Cleveland, Ohio, July 6, 2022. (Saul Loeb/AFP via / Getty Images)
Citing figures from the National Bureau of Economic Research, the post states that their "recession indicator variables" have "exhibited strong growth in the U.S. economy since the start of the pandemic, and have continued to expand through the first half of this year."
Even if the Bureau of Economic Analysis' advance estimate of the second quarter GDP shows a negative number, the blog post says the country is likely not in a recession.
"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," the post states.
Meanwhile, inflation surged to a new 40-year high in June, reaching 9.1%.
On NBC News' "Meet the Press," Treasury Secretary Janet Yellen said the economy is not in a recession but rather one that's in a "period of transition" where "growth is slowing."
SINCE BIDEN ADMIN CALLED INFLATION ‘TRANSITORY’, US HAS SEEN 13 STRAIGHT MONTHS OF SOARING COSTS
Treasury Secretary Janet Yellen testifies before the House Ways and Means Committee on Capitol Hill, June 8, 2022. (Jose Luis Magana, File / AP Newsroom)
"The labor market is now extremely strong," Yellen said. "This is not an economy that's in recession, but we're in a period of transition in which growth is slowing. And that's necessary and appropriate, and we need to be growing at a steady and sustainable pace. So, there is a slowdown, and businesses can see that and that's appropriate, given that people now have jobs, and we have a strong labor market."
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Republican National Committee spokesperson Will O'Grady told FOX Business that "redefining" what a recession is won't fix some of the legislative actions that Democrats have taken.
"Joe Biden turned a recovery into a likely recession. Redefining the word will not fix the fact that Democrats wasted $1.9 trillion, resulting in skyrocketing costs for Americans. This further underscores how out of touch Biden and Democrats are with the pain families are feeling," O’Grady said.