Senate Minority Leader Mitch McConnell (R-KY) said that the Biden Administration is trying to redefine the word recession.
“After Democrats’ policies did cause inflation, they moved on to their next wrong prediction. President Biden admitted inflation did exist but said it was, ‘expected to be temporary.’ That one didn’t work out, either,” McConnell said, according to a July 25 news release. “That was over a year ago. Then, seven months ago, in early December, President Biden promised inflation had peaked. Wrong again. It didn’t peak in December, it’s just kept getting worse. Inflation set a fresh new 40-year high just last month.”
McConnell's statement came three days before the Bureau of Economic Analysis (BEA) announced consecutive quarters of negative growth in 2022. Reuters said this is the commonly accepted definition of a recession.
Real Gross Domestic Product (GDP) decreased at an annual rate of 0.9% in the second quarter, the BEA said in its news release. In the first quarter, real GDP decreased by 1.6%.
“Well, now, these same folks are preparing for yet another battle against reality,” he said in his release. “In advance of the GDP numbers coming out later this week, the Biden Administration has begun their latest project —a frantic effort to re-define the word ‘recession.’ The White House published a whole explanation insisting that even if the new data suggest that our country is in recession, we actually won’t be.”
Treasury Secretary Janet Yellen told Chuck Todd on NBC’s Meet the Press that the U.S. was not in a recession, saying that the labor market is extremely strong, according to a White House Briefing Room release.
“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,” Yellen said, the release reported.
The BEA said in its release that contributing factors to the decrease in real GDP include private inventory investment decreases, residential and nonresidential fixed investment and government spending. Export increases and personal consumption expenditures partly offset these.
The negative growth in GDP for Q2 of 2022 is far worse than economists expected, Reuters reported. Economists it polled predicted 0.5% of positive growth.
The National Bureau of Economic Research officially declares when the nation is in a recession and that determination would take months, CNBC News reported.
Recession indications include a 13.5% drop in gross private domestic investment during the second quarter, CNBC said. Consumer spending rose 1%, despite an 8.6% increase in inflation. Spending on services increased by 4.1%. A 5.5% decline in spending on nondurable goods and a 2.6% decline in spending on durable goods offset this.
The Wall Street Journal reported that inflation rose to 9.1% in June, the highest rate in over 40 years.
“I guess the whopping 42% of Americans who say they’re struggling to stay where they are financially are supposed to read the White House’s press release and cheer up,” McConnell said in his release.
