How do you know the United States economy is heading toward a recession? Because the White House is working overtime to suddenly redefine or simply undefine what it means for an economy to be defined as being in a recession.
As an accepted term, a recession indicates two consecutive quarters of negative economic growth. It always has.
The data is what it is. You can try to explain it or downplay it but you can’t deny it as the Biden administration is now attempting to do:
Republican lawmakers have increasingly accused the president of redefining commonly understood terms to try to make the economy appear healthier than it is.
Administration officials have again and again rejected that claim, taking pains to explain the criteria that the National Bureau of Economic Research uses to determine whether an economy was in a recession. The group does not necessarily declare a recession after the country reports a second consecutive quarter of negative economic growth, a common definition of one.
On Monday, Karine Jean-Pierre, the White House press secretary, told reporters during her daily briefing that that shorthand definition was merely a convention of journalists, not a professional evaluation. “The definition used by economists differs,” she said.
The definition used by economists differs? That’s news to most economists. Even the dictionary textbook definition is very clear:
1. a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.
Days ago, Biden flat-out stated the economy would not enter a recession because he still wasn’t sure what a recession was other than a dip in the road on the way to the ice cream shop:
— Bloomberg TV (@BloombergTV) July 25, 2022
On Monday, even CNN could not contain itself over the evasiveness of trying to redefine what a recession is amid clear signs and data points swirling around the economy:
Amid fears of recession, CNN’s Kasie Hunt slams the Biden administration for denying the definition of a recession:
“You can’t fake this!” pic.twitter.com/gGriut3as8
— RNC Research (@RNCResearch) July 26, 2022
As one panelist noted, it’s very likely the data is coming which is why the White House has suddenly decided it needs to pre-empt talk of a recession by, um, redefining recession.
It’s reminiscent of when House Speaker Nancy Pelosi tried to redefine being “unemployed” during the Obama years to mean something like “long vacation to become an artist” or something.
What the White House will try to argue is that two consecutive quarters of negative growth simply does not capture all the nuances of the economy such as unemployment for example. Essentially they’re arguing that it may be a recession, if you want to call it that, Jack, but it’s a “soft recession” or a recession by definition only.
Most Americans probably feel like the country is already in a recession with buying power being diminished by inflation. It’s an odd economic time in reality, but whether the White House wants to admit the country is in a recession or not is probably meaningless since voters will vote with their wallets and their wallets have been screaming about gas and grocery prices for months.
Maybe it depends on what the meaning of the word “is” is.