The White House is battling recession fears as dire economic news emerges

The White House is battling recession fears as dire economic news emerges

WASHINGTON – White House officials have been increasingly trying to combat the narrative that the United States is on the brink of a recession as they look to get ahead of dismal economic data expected on Thursday.

White House officials have been covering air waves during the past week, briefing journalists, publishing the blog publications and asking surrogates to amplify their message as they seek to highlight areas of strength in the economy amid mounting Republican attacks.

“We’re not going to be in a recession,” Biden told reporters Monday.

The White House acknowledged Wednesday that inflation is weighing on consumers, but noted that strong job growth as a hopeful sign for the economy. A senior administration official said one of his concerns is that fears of a recession will cause consumers to pull back, creating a “self-fulfilling negative prophecy” that has prompted the White House to push back worries about the recession ahead of data on economic growth will be released on Thursday.

“I wouldn’t say it’s my biggest concern, but I think it explains why we think it’s important to come out these days ahead of the GDP report and make sure people understand, accurately, that even if you had a number negative tomorrow, we are not and have not been in a recession,” the official said.

Economic analysts expect data to be released on Thursday showing an across-the-board fall in gross domestic product for the second straight quarter, one of the metrics used in the past to signal that the US economy was heading into recession. Earlier this week, data showed consumer confidence fell last month to the lowest level in more than a year.

The Federal Reserve announced on Wednesday that it will raise its key interest rate by 0.75% to combat rising inflation, but Fed Chairman Jerome Powell said he did not think the U.S. was currently in recession

“I don’t think the United States is currently in a recession and the reason is that there are too many areas of the economy that are doing too well,” he said. said.

For months, White House officials have worried about the impact the economy could have on Democrats’ chances of retaining control of Congress and trying to come up with a message that resonates with voters, said a person close to the White House who asked not to be identified discussing internal White House business.

The latest pullback around a recession is indicative of those broader concerns and efforts, the person said.

Indications that the United States may be tipping toward a recession continue to weigh heavily on Democrats with just over three months to go before the midterm elections. Biden has said he and other senior administration officials will increase their travel ahead of the midterms to make the case that his plan to improve the economy is better than the alternative if Republicans take control of Congress this year coming.

“We have to remind people what life will be like for American families, particularly if the Republicans get that power back, and that comes into play by drawing a contrast and making it clear where the Democrats are on the economy versus where they are the Republicans.” said Democratic communications strategist Adrienne Elrod.

As part of the White House’s push this week, officials sought to emphasize areas of the economy that they believed remain strong. Rather, the White House says the U.S. is transitioning to a slower-growing economy, pointing to low unemployment, consumer spending that “is looking solid,” low loan and mortgage delinquencies and household balance sheets that “remain largely in good shape,” Brian. Deese, Biden’s top economic adviser, said.

“The entirety of the economic data is consistent with this kind of transition, and it’s not consistent with a recession,” he said during a briefing with reporters on Tuesday.

Biden continued to push his economic message despite self-isolation with Covid this week, holding virtual events touting the work his administration was doing to lower gas prices and the importance of Congress passing legislation to bolster manufacturing of computer chips in the United States.

“The employment rate is still one of the lowest we’ve had in history, it’s in the 3.6 area, we’re still seeing people investing, my hope is that we move from this rapid growth to steady growth,” he said. We’ll see some go down. But I don’t think we’re going to, God willing, I don’t think we’re going to see a recession.”

Treasury Secretary Janet Yellen made a similar case Sunday on NBC’s “Meet the Press,” saying that “we’re not in a recession right now” and that even if GDP growth slows, “we shouldn’t characterize it like a recession.”

The technical classification of a recession is made by the National Bureau of Economic Research, a private, nonpartisan research group that analyzes a range of data and usually makes a designation long after a recession has begun. But a second quarter of slowing GDP growth will likely give Republicans fodder to try to argue that the US is already in recession.

Whether the country is technically in recession or not can be irrelevant to voters, the majority of which they have said in multiple surveys who believe that the country is already in recession.

It’s a sentiment shared by business CEOs: 15% of whom said they believed their region was already in recession and 60% said they expected one in their core region by the end of the year next year, according to a survey over a year. 750 CEOs globally surveyed in May by the Conference Board.

It’s a reality the White House acknowledged and said it continues to try to address.

“But from the president’s perspective, and that technicality aside, the most important question economically is whether working and middle-class families have more breathing room,” Deese said. “They have more job opportunities, their wages are increasing in a stable way, and they can pay for the important things in their lives.”


Source link

You May Also Like

About the Author: Chaz Cutler

My name is Chasity. I love to follow the stock market and financial news!