Despite President Joe Biden’s refusal to accept the conventional definition of economics the US has entered into a recession.
Biden’s own Commerce Department data showed real GDP dropped by 0.9% in the second quarter after the first quarter showed a 1.6% decline.
When an economy has two straight quarters of negative growth that by definition means the US is in a recession.
Even Mayor Eric Adams told an audience in Staten Island Thursday that times are tough.
“We are in a financial crisis like you can never imagine,” he added.
“Wall Street is collapsing; we are in a recession.”
Yet Biden on Thursday avoided using the term “recession” after the federal government report revealed US gross domestic product declined for the last six months.
“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,” Biden said in a written statement.
It should come as no surprise we have negative growth as the Biden administration admits to creating a soaring 42-year record high inflation rate of 9.1% for June.
To battle the inflation rate, the Federal Reserve has raise its lending rates to 2.5% with its latest boost to the Fed Funds Rate this week. Rising rates will only slow down the economy more, so don’t be looking for a bump in growth for this quarter.
This is the definition of stagflation. Negative growth and soaring costs. Welcome back to the 1970’s.