Despite an increase in economic output during the third quarter, the United States previously met the rule-of-thumb definition of a recession, two consecutive quarters of negative growth, as the output contracted at a 1.6% annualized rate in the first quarter and a 0.6% pace in the second quarter. Klain, however, remarked during an interview with MSNBC that the economy is witnessing a robust recovery under President Joe Biden.
“We are not in a recession. I want to be really, really clear on that,” Klain asserted. “The economy is growing, it is strong, it is creating jobs.”
Polls consistently reveal that voters have their eyes on the economy and inflation more than any other issues, with Republicans leading Democrats by a double-digit margin concerning trust in handling the economy. Although members of the former party criticize the Biden administration and progressive lawmakers for deficit spending even while restricting energy production, members of the latter party claim that their expenditures are meant to decrease the cost of living for households.
Klain cited recent rebounds in the stock market, which has seen one of its worst years in history, as evidence that the administration’s economic policy has been effective. “Our mission here at the White House is to continue that kind of economic growth,” he said, naming inflation as “the problem we’re focused on.”
Voters nevertheless hold the commander-in-chief responsible for the lackluster economy. In a recent survey from Bankrate, roughly 43% of respondents reported that their finances are worse than two years ago. Among those who reported worse finances, 69% placed “at least a moderate amount of blame” on Biden, while 71% placed blame on Democrats in Congress and a smaller but still salient 54% blamed Republicans in Congress. Although 93% of Republicans with lower financial prospects said Biden is to blame, a considerable 30% of Democrats agreed.
Administration officials have repeatedly seized on any glimmer of positive economic news as evidence that the economy as a whole is experiencing a normal recovery. After the release of the preliminary third quarter output forecast, Biden claimed that “doomsayers” had been “rooting for a downturn” while falsely arguing that the nation was in a recession.
“Now, we need to make more progress on our top economic challenge: bringing down high prices for American families,” he remarked. “Congressional Republicans have a very different agenda — one that would drive up inflation and add to the deficit by cutting taxes for the wealthiest Americans and large corporations. It would raise the cost of prescription drugs, health care, and energy for American families. That failed economic vision is not the way to give families more breathing room and grow our economy so working families can get ahead.”
Elevated price levels recently caused the Federal Reserve to increase target federal funds rates by three-quarters of a percentage point. Monetary policymakers have repeatedly warned markets that economic growth will be “essentially flat” in the second half of the year following the dismal first two quarters.