After being proven wrong this summer when he declared that rising inflation was only “temporary,” Joe Biden reiterated his prediction on Thursday that the U.S. economy will not go into recession despite the fact that the first quarter of 2022 saw negative growth figures come in.
Mr. Biden told reporters at the White House, “I’m not anxious about a recession.” Although recession is always a danger, the GDP has dropped to just 1.4%.
There was no drop in GDP to 1.4 percent, which would still be a rise in GDP. As of January-March, the economy declined by -1.4% on an annualized basis, marking the first decrease in total economic output since the commencement of the COVID-19 pandemic in spring 2020. A 6.9 percent annual rate of growth was recorded in the fourth quarter of 2021.
A recession is generally defined as two consecutive quarters of GDP growth that are in the negative territory. In addition, Biden claimed that the economy’s performance “was influenced by technological reasons,” but he provided no further explanation.
“However,” the president explained, “here’s the deal.” Consumption and business investment, along with residential construction spending, all climbed significantly in the third quarter. The unemployment rate is at its lowest level since 1970, which brings us to number two. Last year, a record-breaking 4.5 million new enterprises were established.
Mr. Biden stated in July that increased inflation caused by the economy’s recovery from the COVID closure would be temporary. Rather than that, inflation rose to a 40-year high of 8.5 percent in March, pushed in part by increased federal expenditure, supply chain difficulties, and the disruptions caused by the Russia-Ukraine war.
Mr. Biden chastised House Republicans on Thursday for a proposal he claimed would result in “tax increases on middle-class people, including half of small business owners.” He encouraged Congress instead to send him legislation to expand semiconductor chip manufacture in order to “strengthen our supply chains and create more jobs in America.”
“And Congress must approve legislation to reduce costs and balance the budget by lowering families’ prescription drug and utility rates and restoring justice to our tax code — all without raising taxes on anyone earning less than $400,000 per year,” the president stated in a statement. “That is how we boost the middle class and expand our economy.”
Republicans asserted that Democrats’ $1.9 trillion COVID relief measure enacted in 2021 caused to record-high inflation and harmed economic growth. Rep. Kevin Brady of Texas, the House Ways and Means Committee’s ranking Republican, called the GDP data “extremely disturbing.”
“Our economy is actually contracting under President Biden’s leadership,” Mr. Brady stated. “Four of the president’s five quarterly economic forecasts have been missed. As a result, Americans should brace themselves for weaker employment growth and higher costs in the coming years.”
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