The latest GDP report is about to drop, and the White House is now attempting to redefine what the word recession means – to cover up the horrendous job they have done in such a small amount of time.
According to Forbes in 2022, recession is defined as:
“A significant decline in economic activity that lasts for months or even years. Experts declare a recession when a nation’s economy experiences negative gross domestic product (GDP), rising levels of unemployment, falling retail sales, and contracting measures of income and manufacturing for an extended period of time. Recessions are considered an unavoidable part of the business cycle—or the regular cadence of expansion and contraction that occurs in a nation’s economy.”
According to the new definition thought up by the Biden administration, recession means something a little bit different now, not a drop in GDP over two quarters.
“While some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle,” the White House Council of Economic Advisers wrote in a blog post last week.
“Instead, both official determinations of recessions and economists’ assessment of economic activity are based on a holistic look at the data—including the labor market, consumer and business spending, industrial production, and incomes,” the WH release claimed. “Based on these data, it is unlikely that the decline in GDP in the first quarter of this year—even if followed by another GDP decline in the second quarter—indicates a recession.”
Over the weekend, Treasury Secretary Janet Yellen attempted to get ahead of the upcoming financial figures.
“We’ve got a very strong labor market. This is not an economy that’s in recession,” Yellen said on NBC’s “Meet the Press.”
Apparently to Yellen, there is “no sign” of a coming recession – despite the fact that inflation has got so high, Americans are unable to pay for gas and rent now.
“You don’t see any of the signs. Now, a recession is a broad-based contraction that affects many sectors of the economy. We just don’t have that,” Yellen said.
Economist Peter Schiff said that once two consecutive quarters of GDP growth are in negative territory – both at negative 1.6 percent – it would be nearly impossible for the White House and the media to be able to spin such a dire situation into a positive one.
“When we end up with an even weaker number for the second quarter, that really throws a bunch of cold water in the face of the idea that we have a strong economy. And given how weak the Q3 data already is… We don’t have a lot of July data yet, but it’s starting to come in and what we’ve seen is pretty ugly. And it makes a lot of sense that the third quarter would be even weaker than the first two because interest rates are going to be a lot higher in the third quarter than they were back then. Next week, the Fed is set to raise interest rates 75 basis points. We’re going to be up to 2.25 to 2.5%. If we were in recession when interest rates were 0.5%, 1%, 1.5%, think about how much worse that recession is going to be when interest rates are higher.”