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The U.S. economy is not currently experiencing a recession, and news on inflation is “encouraging,” according to liberal New York Times columnist Paul Krugman.
Krugman argued two consecutive quarters of negative growth do not equate to the “technical” or “official” definition of the term, asserting instead that the determination lies with the Business Cycle Dating Committee.
Despite this claim, Krugman predicted there was a 50-50 chance history will look back on 2022 and early 2023 as a time when the country experienced “a mild recession.”
“But what’s in a name?” the columnist asked.
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There’s good news, according to Krugman. Gasoline is down nearly 80 cents a gallon since June and business surveys are now suggesting a “significant drop” in broader inflation.
“As I suggested, early indications are that the Fed is winning its war on inflation, and doing so faster and more easily than most observers expected,” Krugman said, before touting a strong labor market.
In addition, the Times column suggested parts of inflation that are not coming down are the result of “global forces” outside the country’s control.
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“And if the portion of excess inflation that does reflect U.S. policy can be unwound fairly quickly, without severe costs, a fair reading of the record would say that policy was actually very successful — that a temporary rise in inflation was a price well worth paying to avoid the kind of long-term depressed economy we experienced after the 2008 financial crisis,” Krugman added.
Furthermore, the column also turned its attention to climate change, which Krugman urged could mean “the end of the world,” rather than an “episode” of inflation. Furthermore, the columnist said that while preliminary GDP numbers have been negative, the overall economic news “looks fairly positive.”
National Economic Council Director Brian Deese said Monday on CNN that the GDP report would be “inherently backward looking.”
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“Certainly in terms of the technical definition, it’s not a recession,” Deese said. “The technical definition considers a much broader spectrum of data points.”
President Biden also spoke on the GDP numbers Thursday, arguing it “doesn’t sound like” there is a recession.
Despite the economy entering a technical recession after Thursday’s gross domestic product showed 0.9 percent contraction on an annualized basis from April through June, outlets including The Washington Post, CNN, and The New York Times chose to embrace the White House’s definition of a recession, arguing that those who disagree are “fueling recession fears.”
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Figures on MSNBC and CBS claimed that a recession was a “political football” and a “buzzword” cultivated to dominate midterm advertisements meant to hurt Democrats.
Fox News’ Hanna Panreck contributed to this report.
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