Are we headed for a recession?
That’s a question on a lot of people’s minds right now. But, what does a recession look like when we have a strong labor market?
- Plus: a crucial week for detained WNBA star Brittney Griner.
- And: hope for the holy grail of coronavirus vaccines.
Guests: Axios' Neil Irwin, and Errin Haines, editor-at-large for The 19th.
Credits: Axios Today is produced by Niala Boodhoo, Sara Kehaulani Goo, Alexandra Botti, Nuria Marquez Martinez, Lydia McMullen-Laird, Alex Sugiura, and Ben O'Brien. Music is composed by Evan Viola. You can reach us at [email protected]. You can text questions, comments and story ideas to Niala as a text or voice memo to 202-918-4893.
- Americans no longer judge the economy by the unemployment rate, new paper finds
- Biden tells Cherelle Griner he's working to secure Brittney Griner's release
- FDA allows pharmacists to prescribe Paxlovid COVID treatment
- Pfizer to begin testing universal coronavirus vaccines
NIALA: Good morning! Welcome to Axios Today!
It’s Thursday July 7th. I’m Niala Boodhoo.
Here’s what we’re watching: a crucial week for detained WNBA star Brittney Griner. Plus, hope for the holy grail of coronavirus vaccines.
But first, today’s One Big Thing: how to tell if we’re headed for a recession.
Is the US sliding into a recession? That's a question on a lot of people's minds right now, but I have another one for you. What does it look like to have a recession when we have a strong labor market? Here to break down what a recession really means and what economic challenges lay ahead for us is Axios’ chief economic correspondent, Neil Irwin. Hi Neil.
NEIL IRWIN: Hi Niala.
NIALA: Let's start with an important definition - while lots of people are throwing around the term recession, it's actually up to the National Bureau of Economic Research to actually define if a recession is occurring, correct?
NEIL: Yeah, there's a committee of eight academics, eight PhD economists who have meetings every now and again, to debate whether or not there, uh, has been a turning point in the economy and either a recession has started or a recession’s ended. They define it as a significant decline in economic activity spread across the economy that lasts more than a few months, uh, which is a mouthful, but that's how they think of a recession.
NIALA: How do most people think about the definition of a recession?
NEIL: I think if you're a normal person, just living your life, trying to, you know, have a job and have a good economic life, what you think of is “a recession’s when things are bad,” right? It's almost that simple. If it's hard to get a job, it's a recession. If you can't afford your groceries and your gas bill, that's a recession. That's different from how economists think of it, which is when things are actually in decline, not when things are just bad for whatever reason.
NIALA: And so one way we can think about whether or not things are in decline is by looking at our GDP numbers, our economic output. We saw some numbers last week from the Atlanta Fed that may point to a slowing in this area. Are experts worried about our gross domestic product and how much we're outputting?
NEIL: So, what you're referring to is this kind of rule of thumb that you see a lot, which is a recession is two quarters in a row of negative GDP growth, of the economy contracting. And that can be a useful rule of thumb when you're doing kind of international comparisons, things like that. But that's not really the definition that we use in the United States for a lot of reasons. And what's happening is we did have a negative quarter in the first quarter of this year and the second quarter just ended a couple of days ago. We don't know yet what that number's gonna look like, but there is reason to think that might end up being a negative number too.
If that's the case, we will hit that threshold of two negative GDP quarters in a row. But that alone doesn't mean we're in recession. And in fact, if you look at most of the data, there's not much reason to think that the US economy has been in recession during this first half of 2022. Now that said, uh, there are a lot of risk factors and a lot of things pointing to a possible recession as the year progresses.
NIALA: One of those things that's not a risk factor though, Neil, is the labor market. That's still been relatively strong? How much do economists think that will make a difference?
NEIL: So it makes a huge difference. I mean, the labor market is a core part of how the economy grows, of how people live their economic lives. And it's been booming throughout 2022 so far. The unemployment rate at 3.6%. We've been adding four or 500,000 jobs a month. We'll see on Friday what the June number looks like. But for now, the rates of layoffs are actually pretty low. Jobless claims are low. These are all good signs that the labor market is fundamentally healthy. The question is not whether it's been healthy the last six months, though. The question is what's gonna happen as we get into the back half of the year into 2023.
NIALA: What risks are you paying attention to? What should we be looking for and be concerned about?
NEIL: Well, we've seen a massive adjustment in the financial markets in the last three months, four months, as the Federal Reserve has adopted a much more aggressive campaign to try and bring down inflation and raising interest rates. What that’s done is driven down stock prices. It's made people less wealthy, it's caused mortgage rates to really skyrocket. You know, we see this in all different corners of the economy. We see it in kind of, venture funded companies having layoffs. We don't know how far this will spread - you know, does this feeling that everything is going in a bad direction, does that cause all types of companies to start pulling back on hiring, pulling back on investments? That's how we could end up in a recession again, later this year or next year. It hasn't really happened yet. There's just a lot of warning signs, a lot of survey evidence that people are really nervous, not feeling good about things.
NIALA: Neil Irwin is one of the authors of the daily Axios Macro newsletter. Thanks Neil.
NEIL: Thanks Niala.
NIALA: In a moment: the latest on basketball star Brittney Griner’s Russian detention and trial.
NIALA: Welcome back to Axios Today. I'm Niala Boodhoo.
“I'm terrified I might be here forever.” That's what WNBA star Brittney Griner said in a letter to President Biden from a Russian prison, where she's been since February. Yesterday, Biden told Griner's wife that he's working to bring her home.
She was arrested on drug smuggling charges sometime in February after airport officials allegedly found vape cartridges with traces of cannabis in her luggage. Here to break down this crucial week for the former Olympian is Errin Haines, editor at large for The 19th, a nonprofit newsroom covering gender, politics and policy. Hi Errin.
ERRIN HAINES: Niala, thanks so much for having me.
NIALA: Errin, can you catch us up quickly on how Brittney Griner ended up in a Russian prison to begin with?
ERRIN: Sure. So, Brittney Griner is a WNBA player. She plays for the Phoenix Mercury, but she also plays basketball overseas in Russia. And so she was detained on these alleged charges that she had these vape cartridges of hashish oil and her trial started last Friday. That is expected to last at least a couple of months before she is adjudicated, possibly sentenced. And, so her freedom and future are definitely very uncertain at this point.
NIALA: How much do we think she has been caught up between overall tensions between the US and Russia, and then of course, with the Russian invasion of the Ukraine?
ERRIN: So Niala, Brittney's detention and Russia's invasion of Ukraine actually both happened in February, which made her situation even more precarious, right? And so, the United States has declared Brittney a wrongful detainee, meaning that they believe that she is not being legally held and that they are contesting her detention and these negotiations can be very fragile, but that is certainly the goal of Brittney's wife, Cherelle, who actually had a chance to finally speak with the president and vice president yesterday, where the president reassured her that, that he and the administration are doing everything that they can to to secure her freedom.
NIALA: Griner's Phoenix Mercury coach, Vanessa Nygaard said Monday that Griner being Black and an openly gay woman has made it harder to gain awareness and attention to her case. How much has Griner's identity affected the conversation around her release?
ERRIN: That is something that Coach DAWn Staley, who was Griner's coach on Team USA has also raised, both of them saying things like if Brittney Griner was a Steph Curry, a LeBron James, they do not think that, that she would be in this position. One thing that I can say is that the awareness around Griner's case has definitely been building. Griner's case could also further come into focus today because President Biden will be awarding the Presidential Medal of Freedom to two of her fellow Team USA Olympians, Megan Rapinoe, and also Simone Biles. I can't imagine that we wouldn't be hearing from these women in this moment about their fellow Olympian on the issue of her continued detention.
NIALA: If she's convicted, what are her chances of getting out of this prison?
ERRIN: It's unclear what happens if she is convicted and sentenced how much longer she could be over there. She faces a sentence of up to 10 years for this offense. And so, this is something that's jeopardizing not only her career, but her freedom.
NIALA: Errin Haynes is an editor at large for The 19th. Thanks Errin.
ERRIN: Thank you so much.
NIALA: Before we go, a few COVID headlines: yesterday the FDA announced that pharmacists can now prescribe Paxlovid, Pfizer's antiviral treatment for COVID. Previously, just doctors, nurses and physician assistants could prescribe the treatment, which has become an increasingly important option for high-risk individuals. Axios’ Oriana Gonzalez reports that pharmacies had been pushing for this, arguing it would expand access to Paxlovid. Meanwhile, in case you missed it: Pfizer last week said it would begin testing a universal coronavirus vaccine. Axios’ Tina Reed says a vaccine that works against multiple coronaviruses including COVID-19 would be a holy grail…especially as new variants are outrunning our current vaccines. You can find links to both of those stories in our show notes.
That’s it for us today!
I’m Niala Boodhoo - thanks for listening - stay safe and we’ll see you back here tomorrow morning.