Amid the rising inflation in the United States, the world’s biggest economy saw interest rates being hiked once more by 75 basis points as the US Federal Reserve tried to tackle the menace of price rise. However, the hiked interest rates come with the problem of recession. Economists, CEOs, and many Americans apprehend the looming threat of a recession in the coming months.

As a result, most eyes will be glued to the data on the preliminary reading of second-quarter economic growth to be released by the US government on July 28. The data is going to help economists understand whether the US economy will plunge into a prolonged recession or face a transitory one. But, at the same time, the nation can’t seem to agree on the very definition of recession.

White House Press Secretary Karine Jean-Pierre, recently grabbed attention for stating that "two consecutive quarters of negative GDP growth" is "not the definition of a recession." This is the second time in a week that a White House official has stated that the common rule of thumb is not ‘technically’ the definition of recession.

The National Bureau of Economic Research (NBER) in the US is the official agency that determines whether the economy has slipped into a recession or not. The bureau looks at a "significant decline in economic activity that is spread across the economy and that lasts more than a few months" before terming the economic downturn as a recession.

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However, that has not prevented many from claiming that Jean-Pierre, among other Biden administration officials, has been redefining recession to suit their purpose.

White House Press Secretary, Karine Jean-Pierre redefining “recession”

pic.twitter.com/d1lT7vAKhB— Nigel D'Souza (@Nigel__DSouza) July 28, 2022

However, some users on social media were quick to point out that the role of the NBER is calling for a recession in the country.

Fed Chair Jerome Powell has also stated that the country is not in recession due to “too many areas of the economy that are performing too well.”

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(Edited by : Sudarsanan Mani)

First Published:Jul 28, 2022 12:57 PM IST