The White House is trying to get ahead of any heightened recession chatter in case next week’s GDP release shows a second straight quarter of negative growth.
White House Council of Economic Advisers chair Cecilia Rouse and member Jared Bernstein, present their case inthat the economy is nowhere near recession as defined by the NBER committee's criteria.
Their post notes that the data series most closely watched by the NBER all point to continued growth in the first half of the year: employment; inflation-adjusted personal income excluding government transfers; inflation-adjusted consumer spending; and industrial production. They add that a different recession rule of thumb created by economist Claudia Sahm, using the moving average of the unemployment rate, also does not point to a recession."The American people are digesting a lot of information about the economy, and we're trying to inform the ongoing discussion about the state of the business cycle with concrete information about how important calls, like a recession, are made," Rouse tells Axios.
"That's especially critical right now as some of the key factors in play, such as consumer spending and job growth, have maintained real strength through the first half of this year."Private-sector economists generally agree with the Biden team's take, but they see elevated recession odds ahead. "We are doubtful that the economy is already in recession," said Goldman Sachs economist Ronnie Walker in a research note, but added that forward-looking indicators have softened in recent weeks and that the firm puts 30% odds on a recession in the next year.Expect to hear many administration officials emphasize these ideas in the run-up to next week's GDP release as they seek to get ahead of some potentially nasty headlines, should the number come in soft.
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