Biden admin planning to define away 'recession' if GDP declines a second straight quarter

Don't worry about a recession.  The Biden administration looks to be planning to deny that one is underway, even if Thursday's scheduled GDP report shows a second straight quarter of decline in economic activity.  They will just reject the commonly held standard and rely on a "holistic" evaluation of economic activity.

The commonly held definition of two straight quarters of falling GDP is so pervasive that even Google features it (for now) at the top of the page when searching for a definition of recession.

Jacqui Heinrich of Fox News spotted the sign of the plan to define away the problem in a July 21 White House document:

To be sure, the National Bureau of Economic Research (NBER), which is officially given the responsibility of declaring a recession, doesn't use the two straight quarters of declining GDP as its standard.

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. 

So the NBER has flexibility in deciding when the dreaded label of recession is applied.  But as Heinrich reminds us, they are not always timely when invoking the label:

So don't worry. The Biden administration will play word games to deny the obvious economic decline that it has foisted upon the nation.

On the other hand, Sundance predicts that the Bureau of Economic Analysis (BEA), which will issue the GDP report, will fiddle with the statistics to avoid showing a decline:

CTH has predicted the people within the BEA research group [SEE HERE], ie those who make the determinations of GDP, will circle the statistical wagons and generate something akin to a positive 0.5% GDP figure for Q2.

The reason is simple… As with all other highly political institutions in U.S. government, the BEA is driven by political ideology.

Either way, the tactic is the same: define away the problem.

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