Jul 25, 2022 - Economy

Biden: "We're not going to be in a recession"

Biden participating virtually in a meeting with CEOs and labor leaders in Washington, D.C., on July 25.

Biden participating virtually in a meeting with CEOs and labor leaders in Washington, D.C., on July 25. Photo: Brendan Smialowski/AFP via Getty Images

President Biden said Monday he does not think the U.S. will experience a recession despite decades-high inflation that's showing signs of easing up.

Why it matters: The Commerce Department will release its initial estimate of second-quarter growth Thursday. If it shows that gross domestic product has fallen again, the U.S. would be in the colloquial definition of a recession, which is two consecutive quarters of contraction.

  • In the first quarter of 2022, the U.S. economy contracted at a 1.4% annual rate, the first time it shrank since the spring of 2020 at the onset of the pandemic.

What they're saying: "We're not going to be in a recession, in my view," Biden said. "The unemployment rate is still one of the lowest we've had in history. It's in the 3.6% area. We still find ourselves with people investing."

  • "My hope is we go from this rapid growth to a steady growth, so we'll see some coming down. God willing, I don't think we're going to see a recession," he added.

Yes, but: The White House has argued that even if the number turns out to show a second straight quarter of negative growth, the U.S. economy was almost certainly not in a recession in the first half of this year, Axios' Neil Irwin reports.

  • In following other definitions of a recession, the White House Council of Economic Advisers recently contended that other economic indicators — such as employment, inflation-adjusted consumer spending and industrial production — do not point to a recession.

The big picture: Treasury Secretary Janet Yellen acknowledged Sunday that the U.S. economy is slowing down, but she also pushed back against the idea the U.S. has entered a recession, noting that many of the traditional recession signs are not apparent.

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