President Biden reacted Thursday to news of a second straight quarter of economic contraction by focusing instead on the strength of the labor market, a tactic the White House has used to assert that the United States is not in recession.
“But even as we face historic global challenges, we are on the right path and will walk through this transition stronger and more secure,” Biden said in a statement Thursday. “Our labor market remains historically strong, with an unemployment rate of 3.6% and more than one million jobs created in the second quarter alone. Consumer spending continues to grow.
US gross domestic product (GDP) fell between April and June, according to data released by the Commerce Department. GDP fell at an annual rate of 0.9% in the second quarter, meaning the economy would contract nearly 1% if the pace of second-quarter growth lasted an entire year.
Economists have long used two consecutive quarters of negative economic growth as a rule of thumb for determining when the United States is in a recession and is the official threshold for a recession in other countries. But U.S. economists also factor in a wider range of data when determining a recession and say it may be too early to tell if the U.S. is in it given the strength of the labor market. work.
Biden, in his statement, did not mention the word recession.
In remarks later Thursday, the president argued that the United States is not in a recession, citing low unemployment, job creation and business investment in the semiconductor and vehicle industries. electrical.
“It doesn’t look like a recession to me,” he said.
The administration has recently stepped up its messages that the United States is not in a recession, focusing on the technical definition of a recession to insist that months of strong job growth and healthy spending consumption prove that a recession is not yet here and may not come at all.
The United States has created 2.7 million jobs since the start of 2022, and consumer spending has continued to rise even amid high inflation.
Most economists expected GDP to fall for a second straight quarter as the economy came under more pressure from high inflation, rising interest rates, slowing job growth , lower home sales and other headwinds.
The president also said the data released Thursday came as no surprise.
“After last year’s historic economic growth – and the recovery of all the private sector jobs lost during the pandemic crisis – it is not surprising that the economy is slowing as the Federal Reserve acts to reduce inflation. “, did he declare.
He mentioned a meeting earlier this week with the chairman of South Korea’s SK Group, a company that invests more than $200 billion in American manufacturing. And he noted that Congress was set to pass the China Competition Bill and that there was an emerging agreement in the Senate on the reconciliation package, which is now called the Competition Reduction Act. ‘inflation.
“My economic plan is focused on reducing inflation, without giving up all the economic gains we’ve made. Congress has a historic chance to do that by passing the CHIPS and Science Act and the Reduction Act without delay. inflation,” Biden said.
The White House has argued that both bills will help lower inflation. The president is expected to speak about the reconciliation package on Thursday, after Senate Majority Leader Charles Schumer (DN.Y.) and Sen. Joe Manchin (DW.Va.) announced a $369 billion deal on a package climate, taxes and health care. .
Later Thursday, Biden is expected to meet with CEOs.
—Updated 1:21 p.m.