Texas Republican Rep. Kevin Brady and FreedomWorks chief economist Steve Moore react to the Biden administration denying a recession is coming on ‘Kudlow.’
The Biden administration has led a coordinated campaign to dismiss the technical definition of a recession ahead of Thursday’s anticipated gross domestic product numbers, which are expected to confirm that the U.S. is already, in fact, in a recession.
The recession downplaying began last week when the White House Council of Economic Advisers declared in a blog post on July 21 that “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.”
Department of the Treasury Secretary Janet Yellen testifies before the House Ways and Means Committee during a hearing on Proposed Fiscal Year 2023 Budget on Capitol Hill in Washington, June 8, 2022. (AP Photo/Jose Luis Magana, File / AP Newsroom)
Treasury Secretary Janet Yellen then joined NBC News’ “Meet the Press” over the weekend, where she acknowledged that “the economy is slowing down” but reiterated the administration’s talking points.
“This is not an economy that’s in recession,” Yellen said. “But we’re in a period of transition in which growth is slowing.”
FED’S POWELL SAYS HE DOES NOT THINK US ECONOMY IS IN A RECESSION
White House economic adviser Brian Deese echoed the treasury secretary on Tuesday, telling reporters that “the definition of recession – which has been an issue that I know many of you have reported on as Secretary Yellen said on Sunday – two negative quarters of GDP growth is not the technical definition of recession. It’s not the definition that economists have traditionally relied on.”
Brian Deese, director of the National Economic Council, speaks during a news conference in the James S. Brady Press Briefing Room at the White House in Washington, D.C., US, on Tuesday, July 26, 2022. President Biden’s administration is downplaying d (Photographer: Yuri Gripas/Abaca/Bloomberg via Getty Images / Getty Images)
Several press outlets jumped on board with the administration’s messaging.
BIDEN WHITE HOUSE SLAMMED FOR ‘ARGUING WITH THE DICTIONARY’ AFTER ATTEMPTS TO REDEFINE ‘RECESSION’
Everyone agrees that the National Bureau of Economic Research (NBER) is the arbiter that makes the final determination of whether the economy is in a recession. But the panel does not meet regularly and typically waits up to a year to call it.
In the meantime, the technical criteria for a recession iS two consecutive quarters of negative growth.
Nobel Prize-winning economist Paul Krugman (Photographer: Scott Eells/Bloomberg via Getty Images / Getty Images)
Liberal economist Paul Krugman appeared to acknowledge as much in a tweet promoting his latest New York Times op-ed on Wednesday when he urged Americans to “ignore the two-quarter rule.”
Krugman’s message was retweeted by White House chief of staff Ron Klain.
The NBER has stressed that it relies on more than GDP in determining whether there is a recession, which its website describes as a “significant decline in economic activity that is spread across the economy and that lasts more than a few months.”
But if Thursday’s GDP numbers confirm a second straight quarter of negative growth, the NBER would break quite a pattern if it later determined that the U.S. was not in a recession in the first half of 2022.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
As American Enterprise Institute director of economic policy studies, Michael Strain, points out, each of the last 10 instances of two consecutive quarters of GDP contraction in the U.S. have been declared recessions.
FOX Business’ Megan Henney contributed to this report.
