They’re Really Doing It
AtlanticDec 27, 2022
Recession Fears: US Economy Shrinks for Second Consecutive Quarter
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Image copyright: Getty Images [via NBC News]
The Facts
The US Commerce Dept. on Thurs. reported that US GDP shrank 0.9% from April through June, the second quarterly economic decline in a row following the first quarter's 1.6% drop.
While two consecutive quarters of falling GDP meet one unofficial criterion of a recession, the Dept's National Bureau of Economic Research (NBER) - the official judge of recessions in the US - takes into account additional factors including employment, sales, income, and output.
The Spin
Republican narrative
Just a few days ago Biden said we wouldn't face a recession, but he can't hide from his own Commerce Dept.'s report. The White House is scrambling to spin the concept of what a recession means, but the American people – whose lives have been severely impacted by the current state of the economy – literally aren't buying it.
Democratic narrative
The two-quarter-declining GDP rule is misleading. While GDP makes up a portion of the NBER's deliberations, the committee takes into account other indicators when determining a recession - which hasn't actually been announced. With the current job market, the Biden admin. and the NBER are right to not induce panic: things aren't as bad as some people claim.
