"The U.S. economy is enduring a rocky transition from an exceptionally strong recovery to a steep slowdown, data this past week showed, as rising inflation and interest rates weigh on consumers and businesses. Economic growth surged last year, as consumers unleashed spending and businesses recovered from the short, deep pandemic recession of early 2020. But that robust growth is grinding to an abrupt halt as households, companies and policy makers face deep challenges..."
This is a fairly accurate assessment of what's going on now with the U.S. economy and as even WSJ columnist Greg Ip (p. A2, same issue) writes:
"Whether a recession is eventually declared, the message from the latest economic data is just as sobering: The recovery is, effectively, over. To be sure, the second-quarter decline in inflation-adjusted gross domestic product was a bit misleading. Inventory destocking explains all of the decline, as it did for the first-quarter drop in GDP. Employment is still growing."
In other words, given the last critical marker - and as CBS economist Jill Schlesinger noted last Friday- this does not meet the definition of a recession. But never mind! The Reepos are in a frenzy to tag on the next meme "Biden Recession" i.e. from the same WSJ front page piece:
"Republicans of course seized on the GDP figures, along with elevated inflation, to argue the administration is trying to redefine what a recession is and playing down signs of an economic slowdown. 'Joe Biden’s recession is here. The American people are saying it even if the White House won’t', said Sen. John Barrasso (R., Wyo.),"
But Barrasso is an 'Asso'. So eager are these scumballs to use any disinfo tool to fog Americans' brains and grab power in the midterms. Do not fall for it. We cannot afford to let these lying, conniving traitors and Trump knob polishers back into power!
As for recession, as Nobel winning economist Paul Krugman pointed out in his recent column (NY Times. July 28, 'How Goes The War On Inflation?') :
"The U.S. economy is not currently in a recession. No, two quarters of negative growth aren’t, whatever you may have heard. The “official” or “technical” definition of a recession; that determination is made by a committee that has always relied on several indicators, especially job growth. And as Jerome Powell, the chair of the Federal Reserve, noted yesterday, the labor market still looks strong."
But never mind objectivity. Republicans are desperate to distract attention from the J6 hearings, make no mistake, and their yen is especially to claim the House back so they can begin a string of bogus hearings. Think 3 years of the Benghazi circus was bad? Wait until you behold blowhard asswipe Jim Jordan presiding over "hearings" and "investigations" to try to discredit the January 6 Committee.
Am I just writing this to defend the Dems and Biden in the wake of further Reeptard pile on? Well partly, yes. But let us please get two other points clear:
1) With millions of Americans in a funk and nearly deranged over soaring inflation something had to be done to put on the brakes. Hence, the Fed raising interest rates. The natural consequence of this is an economic slowdown which means slowing the consumer demand that drives inflation.
2) We for sure may be headed for recession, but are not there yet, and likely will not be for at least another year. Don't forget that in the wake of the 2008-09 financial crisis no recession was officially declared until after the Obama administration had secured the $780 b stimulus package in late 2009- which likely saved us from a depression.
Regarding the GDP and how it's falling, other points can be made, especially - as I've written earlier. Namely that GDP is a terrible gauge for productivity. One which another Nobel winning economist (Joseph Stiglitz) said was "mismeasuring our lives."
GDP is supposed to measure the total production and consumption of goods and services in the United States. But the numbers that make up the Gross Domestic Product by and large only capture the monetary transactions we can put a dollar value on. Almost everything else is left out: old growth forests that maintain cooling and act as CO2 repositories, watersheds, animal habitats, e.g. the Everglades, and costs of infrastructure maintenance. But ALL of these count toward the physical security and welfare of a society. If bridges collapse owing to maintenance failure and hundreds or thousands of drivers are inconvenienced, delayed - then that has an economic impact!
In addition, there are hundreds of other contributions not registered that arguably have major economic impacts. For example, a 2015 Forbes article highlighted how 40 million family caregivers in the U.S. are putting their own careers on hold to provide unpaid care — sometimes for decades. The estimated total value of the care has been put at nearly $1 trillion. This isn't reckoned into the GDP but IF it were, the labor productivity would be much higher.
Excerpt:
“Inflation” is the new buzzword of the year. It is the reason for the Federal Reserve’s interest rate hikes designed to increase the costs of some loans. It is the excuse given against renewing the expanded child tax credit program that briefly lifted millions of American families out of poverty. It forms the name of one of the key pieces of legislation that may salvage President Joe Biden’s first term: the Inflation Reduction Act. And, it is the basis of Republican complaints against Democrats heading toward the midterm elections this fall.
With all this concern over inflation, one wonders why so little heed has been paid to another “i” word: inequality.
— from Robert Reich's Substack
Excerpt
So much economic news (with too much of it mis-reported) that I want to keep you apprised.
Following Thursday’s report by the Commerce Department that the U.S. economy had shrunk for the second quarter in a row, economists in and out of the White House have spent much of the last several days deconstructing the word “recession.”
Are we in one or not? The answer, technically, is no (the independent National Bureau of Economic Research in Cambridge, MA makes that call), but most Americans feel we’re in one because their paychecks have been shrinking. Employers have raised wages a bit, but the costs of energy, food, and much else have been rising faster.
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