President Biden shrugged off data Thursday showing that the U.S. economy had shrunk in the first three months of the year.
The president said the nation’s plunging economic activity was the result of “technical factors” and not indicative of the overall picture.
“While last quarter’s growth estimate was affected by technical factors, the United States confronts the challenges of COVID-19 around the world, [Russian President Vladimir] Putin’s unprovoked invasion of Ukraine, and global inflation from a position of strength,” he said.
Neither Mr. Biden nor the White House elaborated on what “technical factors” had led the economy to contract. Mr. Biden did, however, say the economy “continues to be resilient in the face of historic challenges,” such as the coronavirus pandemic and supply chain issues.
“Last quarter, consumer spending, business investment and residential investment increased at strong rates,” the president said. “The number of Americans on unemployment insurance remains at the lowest level since 1970.”
The Bureau of Economic Analysis reported Thursday that the gross domestic product (GDP) shrunk 1.4% in the first quarter. The numbers were far below the 6.9% growth witnessed in the last three months of 2021.
SEE ALSO: U.S. economy shrank 1.4% in first quarter amid inflation, shortages
Business groups, including the Job Creators Network, say that last year’s economic growth was the result of the coronavirus receding. They say the current shrinking economy is the result of Mr. Biden’s policies.
“The big GDP gains of 2021 were because America was gradually reopening from the pandemic,” said Alfredo Ortiz, the president of the conservative Job Creators Network. “President Biden falsely took all the credit then, but today we’re seeing the true impact of Biden’s policies.”
Critics, in particular, say the White House is responsible for fueling inflation through its big-spending COVID-19 stimulus package last year. They say the legislation pumped too much money into an economy facing severe shortages of goods and services, driving prices higher.
“The numbers don’t lie, President Biden’s runaway spending is crippling the U.S. economy,” said Rep. John Joyce, Pennsylvania Republican.
GDP, which measures the final value of goods and services produced, is seen by financial experts as a broad indicator of economic health. Most economists, for instance, define a recession as two consecutive quarters in which GDP has declined.
Many economists have warned that a recession is looming, especially as the Federal Reserve continues to raise interest rates to curtail inflation. Few experts have suggested a recession could hit before the fall, however.
SEE ALSO: Shrinking economy poses another major headache for Democrats ahead of midterms
“The pain of inflation and supply chain challenges can no longer be ignored,” Mr. Ortiz said. “The economy overall is suffering, as today’s GDP report makes clear.”
• Haris Alic can be reached at email@example.com.
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