According to new Blog post The White House’s recession can no longer be quantified by the traditional definition of “two consecutive quarters of declining real growth.”
What’s in the name?
As the global macroeconomic situation continues to deteriorate, US GDP figures scheduled for the second half of this week are likely to show negative growth for the second consecutive quarter, so it is called a “recession” by the current administration. lose.
According to the Council of Economic Advisers, government agencies have preemptively pointed out that the traditional definition is no longer valid.
“Instead, both the official recession decision and the economist’s assessment of economic activity are based on a holistic view of the data, including labor markets, consumer and corporate spending, industrial production, and income. Based on this data, a decline in GDP in the first quarter of this year is unlikely to indicate a recession, even if another decline in GDP continues in the second quarter. “
Numbers don’t lie
In the first three months of 2022, the total output of the US economy shrank at a rate of 1.6%.according to ExpertThis figure could increase by just 0.4% in the second quarter when the government releases new data on Thursday.
In response to this news, Bitcoin and Ethereum fell by about 4% and 7.5%, respectively, and the overall cryptocurrency fell sharply.
This decline also precedes news of the upcoming Federal Open Market Committee meeting scheduled for July 27. Not only that, but the earnings records of some companies in the second quarter are also expected and will be very exciting in the coming days.
Finally, the Fed Raise interest rates Another 75 basis points in the short term to curb inflation. Inflation is currently at 9.1%, the highest level in more than 40 years.
Janet Yellen claims there is no recession on the horizon
US Treasury Secretary Janet Yellen said in a recent press conference that while US growth has been very weak in recent months, consumer spending has increased with a strong labor market. She believes the economy is not in recession, even if things can change significantly in the future.
“This is not a recessionary economy, but we are in a transitional period of slowing growth, which is necessary and appropriate. A recession is a widespread weakness in the economy. I haven’t seen it now. “
So far, the US economy has been able to create a total of 1.1 million new jobs in the second quarter of 2022. That’s about 375,000 jobs a month, three times the employment of the other three months before the recession. During this period, the national unemployment rate has been stable at around 3.6% (between January and April).
