Senate Minority Leader Mitch McConnell accused the Biden administration Monday of trying to prepare for “yet another battle against reality” by redefining what constitutes a recession, ahead of a key economic report later this week.
“In advance of the GDP numbers coming out later this week, the Biden administration has begun their latest project — a frantic effort to redefine the word ‘recession,’” Mr. McConnell said on the Senate floor. “The White House published a whole explanation suggesting that even if the new data suggests our country is in recession, we actually won’t be. It’s almost beyond satire.”
The comments by Mr. McConnell, Kentucky Republican, marked the latest criticism from conservatives that the White House was trying to move the recession goalposts and offer premature political spin ahead of data Thursday that is expected to show the economy shrank from April-June for a second consecutive quarter.
The minority leader was referring to a new blog post made by the White House on Friday about how “economists determine whether the economy is in a recession.”
While the post and some economists consider two straight quarters of negative GDP growth as an informal recession, such official economic downturns are only officially declared by the National Bureau of Economic Research. The NBER, a nonprofit group of economists, looks at indicators beyond simply GDP growth or decline.
“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 White House blog post stated. “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.”
Employers have continued to add hundreds of thousands of jobs each month and inflation has remained high, indicators that the economy is not in a recession despite consumers’ buying power shrinking.
Still, the administration has faced pushback for what critics say is an attempt to deflect from 40-year-high inflation and the sentiment among many economists and voters that a recession is on the horizon.
Alfredo Ortiz, president and CEO of the conservative advocacy group Job Creators Network, accused the White House of “trying to move the recession goalposts.”
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“This is a desperate attempt to prevent Biden from being labeled a recession president, which would further hurt Democrats’ chances in the midterm elections this fall. But even following the administration‘s request to take ‘a holistic look at the data,’ [it] still indicates the economy is in recession,” Mr. Ortiz said. “Historic inflation, a declining labor force, cratering financial markets and record-low consumer confidence only bolster recession indications.”