Well, the White House was criticized over the weekend as many accused them of “changing the rules” on the economic data. 👀
Here’s how the brief blog post hosted on the White House website, “How Do Economists Determine Whether the Economy Is in a Recession?” began.
“What is a recession? While some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle…”
Just that part alone was enough to send the internet into a tailspin. 💫
Given the recent weakening of economic data, most expect this week’s first look at the country’s Q2 GDP rate to come in below zero, which would be the second straight quarter of economic contraction (aka a recession).
But, given the midterm elections are coming up and the administration’s approval ratings aren’t where they’d like them to be, some have hypothesized that this is part of them doing damage control ahead of the official data release. Essentially, by adjusting the definition of recession, they’re “changing the rules” just in time to spin the narrative to something slightly more optimistic.
On the other side of the argument are people saying that the “holistic view” of the data is a more accurate measure of the economy’s health than the GDP report, particularly given the extenuating circumstances over the last few years.
That’s in line with what President Biden and Treasury Secretary Janet Yellen have suggested in their recent media appearances, focusing on the strength of the labor market and consumers instead of the weaker data segments in other areas.
What’s clear is that many professionals on Wall Street and beyond do not share the view that a recession will be short and shallow. 🤷♂️
We’ll just have to wait for Thursday’s preliminary GDP data to be announced and draw our own conclusions. Until then, this is an excellent excuse for both sides to blow off some steam and generate online engagement…so have at it! 😤