Washington: US President Joe Biden said the country’s economy is not heading into a recession. “In my view, the employment rate is still one of the lowest we have had in the history… and we still find ourselves find with people investing,” Biden told reporters on Monday during a virtual meeting on semiconductor chips.
“My hope is we go from this rapid growth to steady growth so we will see some coming down, but I don’t think we are going to…god willing I don’t think we are going to see a recession,” he added.
The second quarter GDP figure for the US is scheduled to be released on Thursday. If it shows negative growth, it will be the second consecutive quarter where the economy contracted. This in turn may be a potential indicator that often many economists term as a recession.
Several economists and analysts had earlier raised concerns about the recession in the US economy due to multi-decade high inflation. The US economy contracted to a 1.4 per cent annual rate in the first quarter of 2022.
Treasury Secretary Janet Yellen on Sunday explained the state of the economy, including its historic strengths, efforts to bring down inflation, and how to interpret the initial reading of second-quarter GDP being announced this week. She explained that the technical and actual definition of a recession takes into account “a broad range of data” and states “this is not an economy that’s in recession.”
“That’s not the technical definition. There is an organization called the National Bureau of Economic Research that looks at a broad range of data in deciding whether or not there is a recession. And most of the data that they look at right now continues to be strong,” she added.
“I would be amazed if they would declare this period to be a recession, even if it happens to have two-quarters of negative growth. We have a very strong labour market. when you are creating almost 400,000 jobs a month, that is not a recession,” the Treasury Secretary explained on being asked about two consecutive quarters of GDP contraction.
The US economy contracted to a 1.4 per cent annual rate in the first quarter of 2022.