Thursday, gross domestic product numbers were released. For the second straight quarter, data says, the economy contracted at a 0.9 percent annual rate from April to June.
In other words, GDP growth was negative for a second quarter. And that, by almost every conventional definition, is a recession. However, other factors such as unemployment rates are sometimes considered.
Biden on Thursday announced a record job market, and record low unemployment at 3.6% and said nine million new jobs since he became president in 2021.
“Businesses are investing in America at record rates. $100 billion in semiconductor investments already announced by Intel, Samsung and Texas Instruments, more than $100 billion electric vehicle battery investments by Ford, General Mothers, Hyundai, Tesla and more. Just last week, SK Corporation of … Korea announced $22 billion in new investment in semiconductor batteries, chargers and medical devices. This is powering the strongest rebound in American manufacturing in over three decades. That doesn’t sound like a recession to me,” Biden said.
However, 61 percent of voters disagree with the president. A recent Winning the Issues Survey asked voters if they think the U.S. is in a recession. In the polling completed before the second straight quarter GDP numbers were unveiled, 61 percent voted yes and 25 percent voted no.
Gene Sperling, Biden’s senior economic adviser, joined “On Balance with Leland Vittert” on Thursday to discuss the president’s perspective on inflation and a recession.
Sperling says this isn’t just about the White House, and that Americans are “frustrated by the fact that global inflation is hitting us here.”
He insisted that Biden understands that for most Americans, it’s a gut punch to go through the grocery line or fill up at the gas pump.
“I think it’s right for a White House, as well as for newscasters, to give a balanced and correct view of the economy. You don’t want to deny the pain people are feeling at the pump. But let me just give a very clear fact. Never, ever in the history of our country have we had a six-month period where you’ve had robust job growth and very low unemployment where it was in a recession. Never,” Sperling said.
Sperling says the White House is not the only one out there saying the U.S. is not in a recession. He pointed to Jay Powell, chairman of the Federal Reserve Board, and earnings calls from Citigroup and JP Morgan, the leaders of which claimed to not see signs of a recession right now.
“So I think it’s important to, as you say, understand the pain people are feeling at the gas pump and the grocery line, but also to let people know that if there’s an R word out there right now, it’s more likely resilience, that 3.6% growth, unemployment and 2.7 million jobs in the first six months is not consistent with anything resembling a recession, not just now, but in the history of our country,” Sperling said.
When asked if the president may be out of touch when it comes to the feelings of some Americans fearing a recession, Sperling noted that Biden has spoken about growing up in a home where even small changes in prices really impacted him.
“We want to let people know that there are more signs in the economy of resilience that can make a transition, we hope, to a more stable growth with lower prices,” Sperling said.
Biden is working on the Inflation Reduction Act, which he says would reduce deficit by $300 billion. How? By investing $369 billion toward climate issues, investing $64 billion to shore up the Affordable Care Act, generating $739 billion in revenue with 15 percent corporate minimum tax, allowing Medicare to negotiate prices, beefing up the IRS and nixing carried interest loophole.
Some have looked at the plan through a critical lens while others, including Sperling, have called it anti-inflationary.
“It not only pays for itself, it lowers the deficit by at least $300 billion,” Sperling said. “Let’s take prescription drugs as an example. It’s going to lower prescription drug costs by $288 billion — that’s helping Medicare have lower spending. That means less high prices for seniors. And it’s going to cap … the amount you’d have to pay at $2,000. That is about lowering prices.
“We’re lowering health care premiums for 13 million Americans. We’re gonna lower energy costs for a variety of Americans and again, not only pay for it, but have have deficit reduction. And that, again, is why even people who leave sparred with the case on the American Rescue Plan, have said this is anti inflationary.”
Who makes the final call of whether or not the U.S. is officially in a recession? The National Bureau of Economic Research, which defines the term as a “significant decline in economic activity that is spread across the economy and lasts more than a few months.”
According to NewsNation polling released Thursday, 65 percent of those polled say they are “very concerned” about inflation. Less than 2 percent reported they were “not at all concerned” with inflation.