US Economy Shrinks for Second Consecutive Quarter... Biden Says "Not a Recession but a Slowdown"

[Image source=AP Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] As the U.S. economy recorded negative growth for two consecutive quarters, President Joe Biden drew a line against concerns of a 'recession' by highlighting solid economic indicators such as employment, consumption, and investment. He also mentioned cases of Korean companies like SK Group, Samsung, and Hyundai Motor investing in the U.S. while emphasizing recent economic achievements.

According to the White House, President Biden issued a statement on the 28th (local time) immediately after the Department of Commerce announced that the second quarter GDP growth rate was -0.9% annualized, saying, "It is not surprising that the economy is slowing down as we move away from last year's historic economic growth and have fully recovered the private sector jobs lost during the pandemic crisis." He explained that this slowdown is not an official recession but a result of the tightening process aimed at lowering inflation.

Typically, two consecutive quarters of negative growth are considered a technical recession. In the U.S., the National Bureau of Economic Research (NBER) determines the official recession status. The NBER, composed of eight economists, evaluates eight major economic indicators including GDP, labor statistics, consumer spending, and industrial production. The Biden administration has emphasized its stance that the current situation cannot be seen as a recession by highlighting a strong labor market ahead of GDP announcements.

On this day, President Biden also emphasized the unemployment rate near a 50-year low and job growth. He said, "The unemployment rate is only 3.6%, and more than one million jobs were created in the second quarter alone," adding, "The job market remains historically strong, and consumer spending continues to increase."

He also cited manufacturing investment as an economic achievement. Referring to SK Group's investment in the U.S., he said, "It is one of the companies that have invested more than $200 billion in U.S. manufacturing since I took office." He explained that such manufacturing investments are fueling the historic recovery of U.S. manufacturing.

President Biden emphasized, "We face historic global challenges, but we are on the right path and will navigate this transition stronger and safer." On the same day, at a press conference related to the 'Inflation Reduction Act,' he highlighted economic achievements, saying, "Since taking office, we have created 9 million jobs, and companies are investing in the U.S. at record rates." He added, "This situation does not look like a recession to me."

U.S. Treasury Secretary Janet Yellen also drew a line during a press conference, saying, "We are witnessing a clear slowdown in economic growth," but "a recession refers to a broad and widespread weakening of the economy, which is not happening now." Secretary Yellen assessed that various indicators, including the labor market, household income, and industrial growth, are not bad at present.

This content was produced with the assistance of AI translation services.