The economic data indicates that the US economy is already in a recession. The Biden administration wants you to think otherwise, and the White House has come up with an interesting way to deny the recession reality. Just change the definition of a recession.
Peter Schiff appeared on the Ingraham Angle with Lauren Ingraham to talk about this White House spin.
The common definition of a recession is two consecutive quarters of negative GDP growth. In the first quarter of 2022, GDP came in at -1.6 percent. The Atlanta Fed projects another -1.6% decline in Q2. That would mean we’re in a recession now, and we have been all year. But White House spokespeople and Treasury Secretary Janet Yellen are quick to remind us that this is not the “technical” definition of a recession.
Technicalities notwithstanding, Ingraham points out that the last 10 times the economy experienced two consecutive quarters of negative GDP growth were technically defined as recessions. She called the Biden administration’s wordplay “a perfect distillation of modern leftism.”
When you’re losing, just change the rules of the game, then declare victory.”
Peter pointed out that the government already changed the definition of inflation from “an expansion of the money supply” to “prices going up.”
So, they may as well change the definition of recession. Because for my entire career, recession has been described by two quarters of negative GDP growth. And we’ve got that.”
During her interview on Meet the Press, Yellen said a recession wasn’t two quarters of negative GDP. She said it was a broad-based economic slowdown. Peter said that’s exactly what we’ve got.
The auto industry is in recession. The housing industry is in recession. Retail is in recession. Advertising is in recession. So many unrelated segments of the economy are in recession — how you can’t say this is a broad-based slowdown — it doesn’t make any sense. And in fact, it’s going to get a lot worse in the third quarter and then probably the fourth quarter as well.”
Ingraham noted that the White House and others denying a recession hang their hats on the tight labor market. But even that is looking shaky. As Peter said, we’ve seen three straight weeks of increasing first-time jobless claims, and they’re at the highest level since October last year.
Meanwhile, if you look at that last job report, even though we added about 400,000 jobs in the establishment survey, the household survey lost about that many jobs. But if you actually look at the jobs, almost all of these new jobs were for people who already had jobs. These were people taking second and third jobs because they’re struggling to pay the bills. And you have a lot of retirees who are being forced back into the workforce because inflation has eviscerated their incomes, and now they have no choice but to go to work. So, these are not jobs that people want. These are jobs that people are forced to take because the economy is so weak.”
Peter also pointed out that employment is a lagging indicator.
I think we’re going to see mass layoffs in the third and fourth quarters of this year as employers start to react to the reality of recession by laying off workers.”
As Ingraham said, next the White House will have to redefine the word layoffs.