As midterms loom, the White House is trying to tamp down fears about a recession
MARY LOUISE KELLY, HOST:
Record inflation has a lot of Americans pessimistic about the economy. And this week, we are expecting some big economic news. Tomorrow more interest rate hikes are likely. On Thursday, new data about economic growth is coming. All this is sparking talk of a possible recession. And with an election not far off, that has the Biden White House preemptively trying to reassure people. Joining us to explain is NPR White House correspondent Asma Khalid. Hey, Asma.
ASMA KHALID, BYLINE: Hi there - good to be with you.
KELLY: And with you. All right. So the economy has been a drag on President Biden and his message for months now, it seems. Why are Democrats worried at this particular moment?
KHALID: Well, it has, but new GDP data this week could show two consecutive quarters of negative growth. And that is something that is often used, you know, as the conventional shorthand for a recession. I do want to be clear here. That is not actually the accurate way to define a recession here in the United States. That actually happens by a group of select economists who sit on something called the National Bureau of Economic Research's Business Cycle Dating Committee. They are a nonpartisan group that looks at a range of economic factors. But the White House does know that this is a messaging battle. Senior administration officials have been holding calls with reporters, trying to explain that the conventional definition is not accurate and that it's important to remember how the overall economy looks right now with record job creation. And then yesterday, in fact, we heard from the president himself who tried to reassure the public during this virtual event.
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PRESIDENT JOE BIDEN: We're not going to be in a recession in my view. We - the unemployment rate is still one of the lowest we've had history. It's in the 3.6 area. We still find ourselves with people investing. My hope is we go from this rapid growth to a steady growth. And so we'll see some coming down. But I don't think we're going to - God willing, I don't think we're going to see a recession.
KELLY: You can still hear he doesn't sound quite like himself there, still coming out of COVID. But I wonder, you know, to his point, technically, whether we're in a recession or not, how much does that matter if a lot of people feel the economy isn't doing well?
KHALID: You know, Mary Louise, I had that same question because a number of recent polls shows that a majority of Americans, in fact, think we are already in the midst of a recession. And the argument I hear from Democrats is that the negative feelings folks have around the economy are a reflection of how they feel about inflation. Democratic pollster Celinda Lake put it this way.
CELINDA LAKE: People are personally experiencing rising cost of living. They're not personally experiencing a recession. They have, in the back of their mind, worry that we might head toward a recession, mainly because they're pessimistic about the economy. So what's next? What's a negative word about the economy? Well, recession is a negative word about the economy.
KHALID: And, you know, Republicans are certainly pouncing on the current economic unease. Yesterday on the Senate floor, the leading Republican, Kentucky's Mitch McConnell, accused Democrats of trying to redefine a recession.
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MITCH MCCONNELL: The White House isn't focusing their energies on correcting their mistakes and making the economy better for working families who are hurting. Instead, their priority is telling everybody things aren't as bad as they look or feel.
KELLY: Asma, just set aside what the politicians say for a minute. Do what do economists say? Are we actually entering a recession or not?
KHALID: You know, I talked to an economist who served on that NBER committee for more than two decades, and he said he does not see the signs of a recession right now. Job, income levels and employment, they are all solid. But a recession is a moving target. And multiple economists I spoke with pointed out that whether we are in a recession right now is very different from whether we might be in one in six months or a year. And, you know, the economists I interviewed seemed to express this degree of caution. I will say, publicly, I don't hear that caution from Democrats. They are projecting confidence, which feels somewhat slippery. I will say it's a difficult message to sell right now, Mary Louise. People often vote not necessarily on the health of the economy at this exact moment but the direction they think it's headed. And that is why the economic messaging battle is so important ahead of the midterms.
KELLY: NPR's Asma Khalid, thank you. Transcript provided by NPR, Copyright NPR.