Republicans declared that the economy is now in a recession after a new report showed negative second-quarter gross domestic product growth.
A common definition of a recession is two consecutive quarters of negative GDP growth. The GDP fell at a 0.9% annualized rate in the second quarter, a preliminary estimate from the Bureau of Economic Analysis showed Thursday morning, following a negative 1.6% rate in the first quarter.
Sen. John Barrasso (R-WY), chairman of the Senate Republican Conference, declared that “Joe Biden’s recession is here” in a statement following the release of the GDP report.
WHITE HOUSE CHALLENGES COMMON DEFINITION OF A RECESSION — HERE’S WHAT TO KNOW
“New data confirmed what a supermajority of Americans already knew — Democrats have plunged America into a recession,” Senate Republican leader Mitch McConnell said on the Senate floor.
White House officials have denied the United States is in recession. They’ve noted that many economic indicators remain strong, most notably employment. They’ve also noted that there is no official definition of “recession” and that the most commonly cited authority, the National Bureau of Economic Research, does not judge that two quarters of contracting GDP automatically defines a recession.
Still, in recent history, there has not been a period with two quarters of negative growth without a recession, which is why so many Republicans are calling foul and accusing the White House and Democrats of obfuscating the reality of the economic situation.
Rep. Blaine Luetkemeyer (R-MO), the ranking member of the Small Business Committee, accused President Joe Biden and Democrats of changing the definition of a recession as consumers suffer the brunt of the economic malaise.
“Two consecutive quarters of economic decline is a recession. This is reality. Washington Democrats will try to spin these numbers in circles, but the hard facts cannot be redefined to meet a political agenda,” Luetkemeyer said.
This week, Sens. Tim Scott (R-SC), Ted Cruz (R-TX), and Cynthia Lummis (R-WY) introduced a resolution that would affirm the definition of a recession as being two consecutive quarters of negative GDP growth.
“The definition of a recession is crystal clear, but President Biden is trying to rewrite history and change the definition of a recession to try to make it seem like the economy hasn’t taken a total nosedive since his presidency began,” said Lummis.
Thursday’s numbers indicate that the economy has been struggling to stay above water during the historic monetary policy tightening cycle by the Federal Reserve, which is trying to lower soaring inflation.
A positive aspect of the economy, which has acted as a bit of a buffer for the Fed’s tightening, is the strong labor market.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
The economy beat expectations and added 372,000 jobs in June. The unemployment rate also remained at 3.6% in June, matching the low level it was at right before the pandemic.
A day before the new GDP numbers were released, Fed Chairman Jerome Powell said he doesn’t believe the economy of the U.S. is in a recession.
