The Biden White House released a statement redefining what constitutes a recession ahead of an expected GDP report showing a continued decline in the economy for the second quarter.
A recession has generally been defined as a period of negative economic growth for two consecutive quarters.
“While some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle,” the White House Council of Economic Advisers wrote in a blog post last week.
Bracing for impact: Even if Thursday’s GDP report shows a second consecutive quarter of negative growth, you won’t hear the Biden admin using the R-word.
— Jacqui Heinrich (@JacquiHeinrich) July 24, 2022
“Instead, both official determinations of recessions and economists’ assessment of economic activity are based on a holistic look at the data—including the labor market, consumer and business spending, industrial production, and incomes,” the WH release claimed. “Based on these data, it is unlikely that the decline in GDP in the first quarter of this year—even if followed by another GDP decline in the second quarter—indicates a recession.”