: US economy not sinking into recession: Biden, top officials #IndiaNEWS #Business By Ashe OneilWashington, July 29 (IANS) US President Joe Biden and top officials of the government have dismissed fears

US economy not sinking into recession: Biden, top officials #IndiaNEWS #Business
By Ashe OneilWashington, July 29 (IANS) US President Joe Biden and top officials of the government have dismissed fears of the countrys economy sinking into a recession as doubling down of the GDP growth rates in two successive quarters at around 0. 9 per cent did not mean recession as unemployment rate was below 4 per cent, house finances were stable and there was consumer spending.
Inventories have stockpiled and consumers have restrained purchases. thats all.
Biden, Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell have all dismissed inflation as transitory. Now they are insisting we are not in a recession and that Americans should not judge the economy by the GDP and inflation.
There is going to be a lot of chatter today on Wall Street and among pundits about whether we are in a recession, Biden said, adding: But if you look at our job market, consumer spending, business investment, we see signs of economic progress in the second quarter as well.
In fact, just after the GDP figure was released on Thursday, the President issued a statement touting the strong labour market, saying that the nation is on the right path and will come through this transition stronger and more secure.
Let me point out that GDP growth and price stability are two of the three goals of economic policy. The third is full employment, he said, adding to an earlier statement that denied recession.
Negative growth and high inflation affect nearly all Americans. Unemployment affects only the extra 3 per cent or 4 per cent of the population who lose their jobs when unemployment rises in a recession. Obviously, then, growth and inflation are the best indicators to judge economic performance because every American feels higher prices daily. With no growth, there is no expansion of opportunities for American households.
This is the first time in four decades that economic growth is negative, and inflation is approaching double digits. In the recessions of 1991, 2001, 2008 and 2020, economic growth was negative, but inflation was generally in the 2 per cent to 3 per cent range or less.
A condition where the economy is experiencing high inflation and a stagnant, no-growth economy, is called stagflation. Even if Biden tries to convince the public that we are not in a recession, the economy is not growing, which means the economy is stagnant. We are experiencing stagflation, economic analysts pointed out.
The economic policy cure for stagflation is difficult. If the policy is geared toward ending the recession by increasing demand, that will tend to make inflation worse. If the primary goal is to reduce inflation by decreasing demand, that will tend to slow growth and make the recession worse, they said.

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