President Joe Biden worked on Thursday to soothe voters' angst about the state of the U.S. economy, saying it was no shock to see a slowdown after data showed the economy contracted again in the second quarter.
After new data showed the economy slowing for the second quarter in a row, Biden appeared before reporters and rattled off a series of his economic accomplishments, including a labor market that continues to add jobs.
"That doesn't sound like a recession to me," Biden said at the end of a speech.
The remarks came as Biden's aides worry that voter anxieties about the economy could tank his Democratic Party in Nov. 8 midterm elections for control of Congress.
The president's approval rating has fallen to a record low of 36%, according to Reuters/Ipsos polling, with the economy listed at the top of voters' concerns as higher grocery, gas and housing bills mount.
While the second straight quarterly decline in GDP meets a standard definition of a recession, the White House says that broader conditions of a recession are nowhere close to being met, given strong consumer spending and job markets.
"It's no surprise that the economy is slowing down as the Federal Reserve acts to bring down inflation," Biden said in an earlier statement. "We are on the right path and we will come through this transition stronger and more secure."
Still, voters and markets worried that a slowdown could be around the corner as policymakers attempt to pump the brakes on an economy where inflation has reached 40-year highs.
New Commerce Department data estimated that gross domestic product fell at a 0.9% annualized rate last quarter, after economists saw the figure ticking up by 0.5%.
White House officials believe the GDP weakness is due to one-off factors, including a decline in companies restocking inventories, that may not reflect broader trends.
They also worry that talking about recession can become a self-fulfilling prophecy as businesses and consumers, concerned that tougher times are ahead, cut back on spending and investment plans.
Biden is set to host the chief executives of Marriott International Inc, Bank of America, and Deloitte along with several top administration advisers at a White House meeting on the economy on Thursday.
The Republican Party has used high inflation and economic weaknesses to attack Biden's economic and spending priorities. The party has been scathing in its criticism of White House attempts to push back on recession talk.
The Fed on Wednesday raised its policy rate by another three-quarters of a percentage point, bringing the total interest rate hikes since March to 225 basis points. Fed Chair Jerome Powell acknowledged the softening economic activity as a result of tighter monetary policy.
© 2023 Thomson/Reuters. All rights reserved.