President Joe Biden sought to assuage voters’ concerns about the status of the US economy on Thursday, saying it was not surprising to see a slowdown after reports revealed the GDP dropped again in the second quarter.

After new data indicated the economy slowed for the second quarter in a row, Biden stepped in front of reporters and listed off a list of his economic triumphs, including a labor market that is still adding jobs.
“That doesn’t sound like a recession to me,” Biden concluded a speech.

The statements come as Biden’s aides are concerned that voter concerns about the economy may derail his Democratic Party’s chances in the Nov. 8 midterm elections for control of Congress.

According to Reuters/Ipsos polls, the president’s approval rating has dropped to a record low of 36%, with the economy topping voters’ concerns as grocery, petrol, and housing prices rise.
While the second consecutive quarterly decrease in GDP fulfills a traditional definition of a recession, the White House claims that the broader conditions of a recession are far from being met, owing to strong consumer spending and employment markets.

“It’s no surprise that the economy is slowing down as the Federal Reserve acts to bring down inflation,” Biden remarked previously. “We are on the right path and we will come through this transition stronger and more secure.”

Still, voters and markets are concerned that a slowdown is on the way as officials try to calm an economy where inflation has reached 40-year highs.

According to new Commerce Department figures, GDP declined at a 0.9 percent annualized rate last quarter, when forecasters predicted a 0.5 percent increase.

Officials at the White House believe the GDP contraction is attributable to one-time events, such as a reduction in companies refilling inventories, that may not reflect deeper trends.

They are also afraid that talking about a recession would become a self-fulfilling prophesy as businesses and consumers, fearful of harsher times ahead, reduce spending and investment plans.

On Thursday, Biden will welcome the CEOs of Marriott International Inc, (MAR.O), Bank of America, (BAC.N), and Deloitte, as well as many key administration officials, at a White House meeting on the economy.

The Republican Party has attacked Biden’s economic and spending policies by citing rising inflation and economic problems. The GOP has been harsh in its criticism of the White House’s efforts to counter recession talk.

The Federal Reserve hiked its policy rate by three-quarters of a percentage point on Wednesday, bringing the total number of interest rate increases since March to 225 basis points. Fed Chair Jerome Powell conceded that tighter monetary policy was dampening economic activity.

Source: Reuters

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