HEY SIRI, DEFINE RECESSION — Set multiple alarms on your phone tonight. Load your coffee machine with the strongest brew you have. And prepare at least six browser windows to frantically refresh this Bureau of Economic Affairs website at precisely 8:30 a.m. on a Thursday morning so that your mind is absolutely blown by the first read , possibly inaccurate and likely to be revised of US economic performance in the second. quarter of this profoundly strange economic year.
We tease. But only a little. Because she it’s actually a big deal if the reading shows that the economy, as measured by gross domestic product, grew a touch or fell a hair in the second quarter. If it is the latter, which many but certainly not all economists expect, it would be the second consecutive quarter of GDP contraction. This is one, but not the only definition of, (scary music) RECESSION!
It’s clearly an obsession in the White House these days, where senior officials from President Joe Biden on down have feverishly told anyone who will listen, publicly and privately, that even two-quarters of negative growth wouldn’t mean a recession.
This is where it gets a little confusing for those who aren’t obsessed with economics, so stay with me until we get to politics. Because technically the White House would be correct. Two drops in a row is A Classic sign of recession. But as I’ve noted in this space before, there’s no official definition of a recession in the US beyond a broad decline in economic activity spread over time.
Official arbitrators at the National Bureau of Economic Research will not make calls in any way for a while. And by many other measures, including job creation, final consumer demand and gross domestic income (among others), this doesn’t look like any kind of recession we’ve had before.
Eliminates a strange drop in inventory build and an increase in imports driven by pandemic-related domestic shortages of goods and first-quarter GDP is likely to have been positive. I won’t get you into the weeds any further, but while the trade deficit lowers GDP, it doesn’t actually indicate a shrinking economy.
However, the number itself on Thursday will only give us an early glimpse in the last three months. It may indicate a more worrisome drop in consumption or show other red flags. Or it can be surprisingly good. But it’s likely to be a very mixed bag either way.
However, this is a big deal politically. Republicans are salivating at the chance to take a negative number, throw out any of the weird nuances, and declare that the “Biden Recession” is going well. Many media may treat it this way as well.
That would be terrible news for the White House and Democratic candidates up and down the midterm ballot. They already face headwinds, given Biden’s dismal overall numbers and his historically low approval rating on the economy. Having to go to the stump and explain why this isn’t technically a recession is the kind of defensive crouch no candidate wants to take. If you’re explaining, as the saying goes, you’re missing out.
But honestly, the much bigger issue for the Democrats it is not GDP. The first, second, and third biggest problems are all the same thing: inflation. The issue eclipses everyone else from Covid to guns and the Ukraine war in the poll of people’s top concerns. The Federal Reserve’s aggressive campaign to lower prices by slowing demand with the open tool of raising interest rates may very well work. But it could also trigger at least a brief recession, as often happens when the Fed is in tightening mode. Like my fellow observer Victoria Guida noted hereThe Fed’s moves are already hitting the economy by making it significantly more expensive to borrow for things like cars, homes and big-ticket appliances.
The central bank’s rate-setting committee, in a unanimous vote, raised rates by another strong three-quarters of a point today with the promise of more to come as inflation – currently running at 6 to 9 per percent a year (depending on which measure you use) – close to the bank’s target of around 2 percent. This will take some timealthough Fed Chairman Jerome Powell eased Wall Street’s concerns today by saying he does not think the US is in recession and at some point it will be appropriate to slow the pace of growth.
The White House and Democratic candidates can take solace in the recent gas price cuts. But these are not a lock to stay given the volatility of the war situation in Ukraine and the sanctions against Russia that will hit at the end of this year. And prices for most other things remain stubbornly high, easily wiping out wage gains and making people feel poorer and deeply upset about the economy in general.
Ultimately: A negative GDP number on Thursday morning would be a political nightmare for Democrats — though not necessarily an economic disaster, unless it’s much worse than expected. A positive number would make the whole argument look ridiculous. Democrats — and frankly all of us — should be more concerned about the new inflation numbers on Friday morning. Set your alarms for that too. And maybe switch from coffee to double espresso.
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— Manchin says he and Schumer have a deal that includes energy, taxes: Sen. Joe Manchin says he and Senate Majority Leader Chuck Schumer have reached an agreement on a bill that includes energy and tax policy, a turnaround after the two deadlocked earlier this month in talks over the agenda. of the democratic party. Manchin said in a press release that his deal with Schumer “would devote hundreds of billions of dollars to deficit reduction by enacting a tax policy that protects small businesses and working-class Americans while ensuring that large corporations and the ultra-wealthy to pay their fair share in taxes.”
– A guide to Trump’s legal threats: While at least two former senior White House officials have appeared before a grand jury recently, it remains unclear whether former President Donald Trump is, or will become, the target of a federal criminal investigation. However, the federal probe is just one of many closer to the former president, including an Atlanta-area grand jury probe by a local prosecutor and a civil probe by the New York attorney general. The DOJ is seeking information on a host of known allies in Trump’s efforts to thwart the transfer of power, and federal prosecutors revealed today that they had obtained a new search warrant to access the phone of one of those allies, attorney John Eastman.
— Blinken to meet with Russian foreign minister and discuss Griner, Whelan: The United States has “put a substantial proposal on the table” to facilitate the release of WNBA star Brittney Griner and Paul Whelan, two Americans arrested in Russia, Secretary of State Antony Blinken said today. Blinken plans to meet with Russian Foreign Minister Sergey Lavrov in the coming days to personally follow up on the proposal, as well as hold further talks with Russian officials.
– Justice Thomas is no longer listed as GWU faculty thereafter deer reverse reaction: Supreme Court Justice Clarence Thomas is not listed as an instructor for any courses on the website for the George Washington University law school, where he has taught since 2011, a removal that follows a controversial high court decision that overturned decades of precedent protecting the nationwide right to access to abortion. . Thomas’ role in the decision prompted a GWU student to start a petition signed by 11,300 people calling for Thomas to be removed from his teaching position at the university.
— The Biden administration is expected to soon declare monkeypox a health emergency: Two people with knowledge of the matter said a statement from the Department of Health and Human Services is expected later this week. The move would follow a similar decision taken last weekend by the World Health Organization. HHS can then take a number of actions, including accessing new money and appointing new staff.
Complicated conversations Saudi Crown Prince Mohammed bin Salman will meet with French President Emmanuel Macron on Thursday in Paris, writes Giorgio Leali. The French president and the Saudi prince will meet for a working dinner at the Elysee palace, Macron’s office said, without giving further details on the purpose of the visit.
The official trip comes as France and Europe scramble to find alternative energy suppliers amid Russia’s war in Ukraine. Earlier this month, Macron met with the president of the United Arab Emirates, Mohammed bin Zayed Al Nahyan, and announced an oil supply deal. At a G-7 meeting last month, Macron called for a mechanism to lower oil prices by asking OPEC countries such as Saudi Arabia to increase production – a solution that did not convince other G-leaders. 7.
The visit also comes shortly after Biden met with Mohammed bin Salman, a move that sparked controversy in the United States.
INCREASE OF TITHES ACT A network of young neo-Nazis is setting up terror cells across Europe and the US to carry out armed attacks, a joint investigation has revealed.
Using fake identities, reporters from Welt Am Sonntag, POLITICO and Insider gained access to about two dozen chat groups of this far-right cell, spoke to insiders and secured more than 98,000 messages, including photos and videos. In the process, they also uncovered death lists, death threats against politicians and journalists, and instructions on how to make bombs and use 3D printers to produce weapon parts.
Alexander Nabert, Christina Brause, Bryan Bender AND Nick Robins-Early spent more than a year investigating and found the real names and stories of some of these young, radicalized neo-Nazis. Read the stunning report.
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