Economist and New York Times columnist Paul Krugman claimed Sunday that the US is not in a recession, and argued that the partisan debate about the term is meaningless anyway.
“None of the criteria that real experts use says we’re in a recession right now, and what does it matter?” he asked with a shrug during an appearance on CNN. “The state of the economy is what it is. Jobs are abundant, although maybe the job market is weakening. Inflation is high, although maybe inflation is coming down.”
“What does it matter whether you use the ‘r’ word or not?” he repeated.
Republicans have pointed out that Thursday’s GDP-data release reflects economic conditions that meet the commonly accepted definition of recession, which is two consecutive quarters of falling GDP. Some economists, however, have stopped short of calling it one here, as the Biden administration also resists the term.
Of the six indicators for determining a recession according to the National Bureau of Economic Research, only one, “real retail sales,” is negative, while “personal incomes,” “payroll employment,” “civilian employment,” “consumption,” and “industrial production” remain positive, economist Brian Westbury has noted.
But soaring inflation also clouds the picture. Despite high consumer demand and plentiful job vacancies, inflation clocked in at a whopping 9.1 percent for the twelve months ending in June. As the Federal Reserve cracks down on price instability with drastic hikes in interest rates, a slowdown in economic growth is expected, and even necessary, Fed Chairman Jerome Powell said at a press conference last week — meaning a recession could be looming even if economists make the case the economy hasn’t entered one yet.
“People want their Biden recession even if it’s not a recession in any technical sense,” Krugman said. He claimed that “especially vitriolic” politics has been injected into the recession conversation lately: “The determination of some people to say ‘We’re in a recession!’ is above and beyond anything I’ve ever seen.”
Republicans, however, argue that the media and Democrats are playing politics with the term too, to protect this administration.
“This is Joe Biden’s recession,” RNC Chairwoman Ronna McDaniel said in a statement. “Biden can lie and deflect blame all he wants, but that will not alleviate the pain Americans feel every time they fill up their gas tanks, go grocery shopping, check their retirement savings, or balance their budgets.”