Second-quarter gross domestic product dropped 0.9%, the government reported Thursday, putting the U.S. in recession territory after the second straight quarter of economic contraction.
The worse-than-expected GDP report will intensify the criticism of President Biden’s handling of the economy in the midterm election year. First-quarter GDP contracted at an annual rate of 1.6%.
Some economists’ informal definition of a recession is two straight quarters of negative growth.
But the National Bureau of Economic Research, a nonprofit group of economists, declares official economic downturns using indicators beyond GDP growth or decline.
Federal Reserve Chairman Jerome H. Powell said Wednesday that he doesn’t believe the U.S. is in recession, pointing to a strong job market and a low unemployment rate of 3.6%.
The Fed raised interest rates again Wednesday by three-quarters of a percentage point in an effort to rein in inflation that hit 9.1% in June.
SEE ALSO: Biden unfazed by worse-than-expected GDP
Republicans said the Commerce Department’s report shows that Senate Democrats are misguided with their new climate-change deal this week to boost spending by more than $400 billion while also raising taxes.
“Since President Biden took office and the Democrats took control of Congress, we’ve been in an all-out economic tailspin,” said Sen. Steve Daines, Montana Republican. “From the inflation crisis to now an official recession, Montana families are feeling the pain of the disastrous far-Left economic policies from this administration. To make matters worse, Biden, [Senate Majority Leader Charles E.] Schumer and the Democrats are trying yet again to pass their reckless tax and spend bill with disastrous Green New Deal policies that put us into a recession in the first place.”
Mr. Biden said Thursday that the U.S. economy is still on the “right path.”
“Coming off of last year’s historic economic growth – and regaining all the private sector jobs lost during the pandemic crisis – it’s no surprise that the economy is slowing down as the Federal Reserve acts to bring down inflation,” Mr. Biden said. “Our job market remains historically strong, with unemployment at 3.6% and more than 1 million jobs created in the second quarter alone. Consumer spending is continuing to grow.”
Mr. Biden said he is focused on lowering inflation “without giving up all the economic gains we have made.” The president urged Congress to help by approving the Senate Democrats’ deal on climate legislation and a $52 billion measure to encourage more domestic manufacturing of semiconductor chips.
Republican National Committee Chairwoman Ronna McDaniel said the president can’t escape responsibility for the downturn.
“This is Joe Biden’s recession,” she said. “Biden can lie and deflect blame all he wants, but that will not alleviate the pain Americans feel every time they fill up their gas tanks, go grocery shopping, check their retirement savings, or balance their budgets. Biden and Democrats are responsible for our shrinking economy, and they’re only trying to make it worse.”
• Joseph Clark contributed to this story.
• Dave Boyer can be reached at dboyer@washingtontimes.com.
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