The administration of U.S. president Joe Biden can try and spin things all it wants – including attempting to redefine what constitutes an economic downturn – but facts are stubborn things. They are even more stubborn when they are being released by the administration controlled by Biden (or rather his teleprompter).
According to the latest data from the U.S. Bureau of Economic Analysis (BEA), the American economy contracted by 0.9 percent on an annualized basis during the second quarter of 2022 (April, May and June). That was marginally better than the minus-1.6 percent reading from the first quarter of the year – but not good enough to avoid the dreaded “r” word.
You know … recession.
“I helped pull America out of a recession before – and, as president, I’ll do it again,” Biden tweeted back in October of 2020.
Instead of solving the worsening inflation problem – which has erased modest income gains – Biden and his allies have been working overtime to try and convince Americans that the nation is not in an economic downturn. That the traditional definitions of “recession” are wrong.
“Two negative quarters of GDP growth is not the technical definition of recession,” top White House economist Brian Deese said earlier this week. “It’s not the definition that economists have traditionally relied on.”
The problem with that spin? The technical definition of a recession is two consecutive quarters of economic contraction – which is exactly what has happened (according to Biden’s own commerce department, no less).
And while a second quarterly gross domestic product (GDP) estimate will be released next month – and a “final” estimate in September – don’t expect to see a revision big enough to move the second quarter number back into the black.
“The decrease in real GDP reflected decreases in private inventory investment, residential fixed investment, federal government spending, state and local government spending, and nonresidential fixed investment that were partly offset by increases in exports and personal consumption expenditures,” federal bean counters noted.
“Partially offset” being the key words there …
Anemic personal consumption – which expanded by a modest 1 percent during the second quarter – is of particular concern as it continues to trend lower. This metric clocked in at 1.8 percent during the first quarter and was projected to clock in at 1.2 percent during the second quarter.
“Unfortunately this is just the start as absent (stimulus checks), the U.S. consumer has long ago tapped out,” our friends at the website Zero Hedge noted.
Indeed … and they have also maxed out their credit cards.
Where do Biden and his economic advisors go from here? Good question … but this official recessionary data point is yet another driver of the only narrative Americans are truly focused on at the moment: “The economy, stupid.” It is also yet another mile marker on the backward path Biden has taken the nation economically since taking office last January.
THE DATA …
ABOUT THE AUTHOR …
Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and seven children. And yes, he has LOTS of hats (including that old school Toronto Blue Jays’ lid pictured above).
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