Some liberal media outlets are starting to align with the Biden administration’s idea of redefining what a recession is before potentially devastating economic statistics are released.
Economic data to be revealed on Thursday could show two consecutive quarters of negative gross domestic product (GDP) growth, which has long been the measure of whether the US is in a recession.
However, there has been a strong push from the White House to preemptively state that even though the US economy has shrunk in two consecutive quarters, that doesn’t necessarily mean the economy is in recession.
Jared Bernstein of the White House Council of Economic Advisers insisted that neither President Biden nor the White House would “sugar-coated” incoming GDP numbers, telling CNN on Saturday that only the National Bureau’s Business Cycle Dating Committee. Economic Research can determine if the US economy is in recession. Treasury Secretary Janet Yellen said on Sunday that two quarters of negative GDP growth is not the “technical definition” of a recession despite acknowledging that it is the “common” definition, defining it on NBC as a “full-scale contraction in the economics “based on a wide range of data.
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White House Director of the National Economic Council Brian Deese echoed Yellen by citing the so-called “technical definition” of a recession, which he told CNN implies a “much broader spectrum of data points” and dismissed “technical debates on back data.” White House Adviser Gene Sperling also pushed similar arguments during his appearance on Fox News’ “The Story”, suggesting Monday that the “job market” plays a significant role in what actually contributes to a recession.
Now, the media is embracing the talking points.
New York Times columnist Paul Krugman told readers that “chances are good” that GDP shrank in the second quarter, which will trigger “breathless comments” about the existence of a recession. But he insisted “we won’t be”.
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“That’s not how recessions are defined; more importantly, they aren’t should be defined, “Krugman wrote Tuesday.” It is possible that people who actually decide whether we are in a recession … will eventually declare that a recession started in the United States in the first half of this year, although that is unlikely given Other data.”
His assurances that a recession would not be realized came just days after he offered a mea culpa for wrongly predicting in 2021 that the country would not face severe inflation. He also predicted that a global recession would break out in 2016 following Donald Trump’s election victory.
New York Times economic reporter Ben Casselman insisted it’s “hard to tell” whether the country is facing a recession regardless of what Thursday’s numbers reveal.
“Economic output, as measured by gross domestic product, declined in the first quarter of the year. Government data coming out this week could show it declined in the second quarter as well. Such a two-quarter decline would meet a common, though not official, definition of a recession, ”Casselman wrote on Monday. “Most economists still don’t think the US meets the formal definition, which is based on a broader set of indicators, including measures of income, spending and employment growth.”
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Like the White House, Casselman referred to NBER’s Business Cycle Dating Committee, something it says “try to be final” and defended its long timeline (“up to one year”) to determine if a recession has occurred. , writing, “even if we are already in a recession, we may not know – or, at least, we may not have official confirmation – until next year”.
Boston Globe reporter Jim Puzzanghera sounded a similar tone Saturday, stating that “it’s not officially a recession until a small group of experts led by Cambridge’s National Bureau of Economic Research say so – and they are known to take the lead. their time “.
Politico’s Ben White tweeted Tuesday: “The White House is obviously right that even two quarters of the GDP contraction would not prove that the economy is currently in recession.” He wrote last month, however, that “I am sorry to report that the conditions are ripe for a slide in gross domestic product growth lasting at least two quarters, the technical definition of a recession.”
After a Twitter user pointed to his former language, he wrote: “I did. I should have gone into the ‘technical’ part further. Mea culpa.”
MSNBC’s Stephanie Ruhle praised the piece White wrote in which she reported: “Many economists agree that this post-pandemic moment doesn’t meet many criteria for recession.”
The Associated Press published an “EXPLAINER” on when to know that a recession has begun, telling readers, “By a common definition, the US economy is on the verge of a recession. Yet that definition is not what matters.” .
“On Thursday, when the government estimates gross domestic product for the April-June period, some economists think it could show that the economy shrank for the second consecutive quarter. That would satisfy a long-standing assumption for when a recession, “AP reporter Christopher Rugaber wrote Monday. “But economists say that wouldn’t mean a recession has begun. During those same six months that the economy may have contracted, businesses and other employers added a prodigious 2.7 million jobs, more than those earned in most of the years before the pandemic. Wages are also rising at a healthy pace, with many employers still struggling to attract and retain enough workers. ”
AP’s “EXPLAINER” was later shared by the Washington Post.
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Bloomberg analyst Simon White urged viewers “you have to be careful enough” to look at only one indicator of a recession like negative GDP growth, insisting that Tuesday’s assessment of a recession implies a “really broad set of indicators.”
White went on to suggest that looking at GDP is “useful”, but dismissed it as a “false false”.
CNN White House reporter Jeremy Diamond, after a network panel mocked the White House’s attempt to redefine what a recession is, said the White House was “really right” in saying that consecutive quarters of negative growth did not. they were indicative of a recession.
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“The White House has been eager to dismiss the notion that two consecutive quarters of negative GDP growth automatically equate to a recession. Yes, that’s a rule of thumb. But the White House is really emphasizing here and trying to educate the public essentially , in the last week, that there are all these other economic indicators that go into that as well, and that it’s not necessarily indicative of a recession. They’re actually right about that, “Diamond said Tuesday. “The National Bureau of Economic Research, which is the non-profit and non-partisan body that effectively determines whether the US economy is in recession or not, also takes into account other factors, including employment, income personnel, industrial production. GDP numbers are a significant part of that equation. “