Casey Mulligan, former chief economist of the Council of Economic Advisers (CEA), criticized the Biden administration for trying to redefine what a recession means. Several underlying indicators suggest the U.S. is headed for an economic recession despite President Biden’s insistence that the economy is strong, Mulligan — who served in the Trump administration between 2018 and 2019 — said in an interview with FOX Business. In recent days, several top White House officials have downplayed the technical definition of a recession and argued that two consecutive quarters of negative gross domestic product (GDP) growth do not indicate a recession. “It seems to me that the White House seems to be saying, ‘yeah, you’re working more and earning less, but at least you’re working more,’” said Mulligan, who is currently a professor at the University of Chicago. . “I don’t understand the significance of this. We work to win. This part of winning is not good.” “That’s really GDP. GDP combines both labor income and capital income, but they tend to move together,” he continued. month as well as the last year”. WHITE HOUSE SAYS ‘UNLIKELY’ TO BE SIGNIFICANT OF RECESSION US Treasury Secretary Janet Yellen downplayed recession fears on Sunday, insisting the US economy was “not an economy in recession” and said the country was in a “transition period”. (Justin Tallis/Pool via REUTERS/Reuters Photos) Biden’s top White House economic advisers Brian Deese and Jared Bernstein, CEA Chair Cecilia Rouse and Treasury Secretary Janet Yellen have all poured cold water on predictions that the US economy is entering a recession in recent days. They have pointed to strong job growth in recent months and the National Bureau of Economic Research’s definition of a recession. “Significant evidence suggests that the economy is not currently in recession, including persistent strength in the labor market, expanding industrial production and alternative estimates of economic growth that point to a brisk expansion,” two Treasury officials wrote in a blog post which was published on Monday evening. . AMERICANS’ INFLATION EXPECTATIONS TAKE TO NEW 11-YEAR HIGH IN JUNE, NEW YORK FED SAYS The U.S. has added between 370,000 and 400,000 jobs each month since March, after adding 714,000 jobs in February, according to Labor Department data. However, high inflation reduced workers’ wages and caused consumption to decline. The debate over the definition of a recession comes ahead of the Bureau of Economic Analysis’s advanced estimate of second-quarter GDP growth, which is scheduled to be released later this week. The GDPNow model projected that GDP fell 1.6 percent in the second quarter, matching the decline in the first quarter and marking the second straight quarter of negative growth, the Federal Reserve Bank of Atlanta noted in a report last week. “It looks like, after the first quarter, it’s going to be a very sharp decline in productivity like we haven’t seen in a long time, maybe ever,” Mulligan told FOX Business. “We already know that in real wages. But the earning power of people, who are working, has really shrunk.” “I think it’s a little premature to call it a victory for labor growth,” he added. “Generally, when we see productivity decline, we see job losses. Those job losses could come in the next two to three months.” BANK OF AMERICA ANALYSTS NEED SEVERE RECESSION TO COOL INFLATION Additionally, Michael Strain, director of economic policy studies at the American Enterprise Institute (AEI), noted in a tweet on Monday that a recession has been officially declared every time the economy has experienced two consecutive quarters of negative GDP growth since the 1950s. Mickey Levy — chief economist for the Americas and Asia at Berenberg Capital Markets and a member of the Manhattan Institute’s Open Market Shadow Committee — said the economy is likely entering a type of recession, but the size of the recession is not yet clear. “Things are clearly weakening, actually weakening toward a recession-type environment,” Levy told FOX Business. “That’s where I think we are now.” GET THE FOX BUSINESS ON THE GO BY CLICKING HERE “I think we’re headed for a shallow recession,” he continued. “But the difficulty right now is that it’s just unfolding and we don’t have enough monthly data to support the anecdotal evidence.”
