President Biden, who was wrong last summer when he predicted high inflation would be “temporary,” said Thursday he doesn’t foresee a recession despite the news that the U.S. economy registered negative growth in the first quarter of 2022.
“I’m not concerned about a recession,” Mr. Biden told reporters at the White House. “I mean, you’re always concerned about recession but the GDP, you know, fell to 1.4%.”
Gross domestic product didn’t fall “to” 1.4%, which would still be positive growth. The economy shrank in the January-to-March period at an annual rate of -1.4%, the first contraction of total economic output since the start of the COVID-19 pandemic in spring 2020. In the fourth quarter of 2021, the economy grew at an annual rate of 6.9%.
Economists traditionally define a recession as two consecutive quarters of negative GDP growth.
Mr. Biden also said the economy’s performance “was affected by technical factors” that he didn’t explain.
“But here’s the deal,” the president said. “We also had last quarter consumer spending and business investment and residential investment increased at significant rates, both for leisure as well as hard products. Number two, … unemployment is the lowest rate since 1970. A record 4.5 million businesses were created last year.”
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Last July, Mr. Biden said high inflation brought on as the economy recovered from the COVID shutdown would be short-lived. Instead, inflation in March hit a 40-year high of 8.5%, fueled in part by high federal spending, supply chain woes and the disruptions of the Russia-Ukraine war.
Mr. Biden on Thursday criticized congressional Republicans for a proposal that he said would end up “raising taxes on middle-class families, including half of small business owners.” He urged Congress instead to send him legislation to increase production of semiconductor chips “to bolster our supply chains and make more in America.”
“And Congress needs to pass legislation to lower costs and lower the deficit, reducing families’ prescription drug and utility bills and restoring fairness to our tax code — without raising taxes on anyone making less than $400,000 per year,” the president said in a statement. “That’s how we grow our economy and strengthen the middle class.”
Republicans said Democrats’ $1.9 trillion COVID relief bill in 2021 has contributed to record high inflation and hurt economic growth. Rep. Kevin Brady of Texas, top Republican on the House Ways and Means Committee, called the GDP report “very troubling.”
“Under President Biden’s leadership, our economy is actually shrinking,” Mr. Brady said. “The president has missed four of the five quarterly economic projections. So Americans ought to brace for slower job growth and higher prices ahead.”
• Dave Boyer can be reached at dboyer@washingtontimes.com.
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