House Speaker Nancy Pelosi, D-Calif., said in 2008 that a recession was the result of two quarters showing a negative gross domestic product, but is now distancing herself from that definition.
"While they may have saved the second quarter from a technical definition of recession, the fact is we are now into the third quarter and we need to have another stimulus package," Pelosi said in a 2008 video from C-SPAN during the Great Recession and posted on social media.
Pelosi's 2008 statement then is now at odds with President Joe Biden and the White House after a report this week showed a second consecutive quarter of negative GDP growth.
The U.S. Bureau of Economic Analysis reported Thursday a drop of 0.9% in the GDP after posting a 1.6% drop in the first quarter of the year, technically meeting the definition.
The understanding that declining GDP production in two consecutive financial quarters of the year means the nation is heading into a recession is also included in definitions by Merriam Webster and publisher Oxford Languages.
Merriam Webster defines an economic recession as "a period of reduced economic activity," while Oxford Languages defines it as "a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters."
Biden on Thursday, however, pointed to low unemployment and a rebound in manufacturing jobs to dispel the notion that the report means the country is headed for further economic decay.
"That doesn't sound like recession to me," the Washington Post reported Biden saying at the White House Thursday.
A "fact sheet" from the White House July 21, a full week before the report, tried to dispel the recession notion ahead of time.
"While some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle. Instead, both official determinations of recessions and economists' assessment of economic activity are based on a holistic look at the data — including the labor market, consumer and business spending, industrial production, and incomes," the statement said. "Based on these data, it is unlikely that the decline in GDP in the first quarter of this year — even if followed by another GDP decline in the second quarter — indicates a recession."
According to the Federal Reserve, the Great Recession in 2008-09 was the "deepest" since World War II, with GDP falling 4.3% from the peak to the trough 18 months later.
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