Jared Bernstein, a member of President Joe Biden’s Council of Economic Advisers, on Sunday deflected on whether the United States is bound for a recession.
During an interview with Fox News anchor Shannon Bream, Bernstein was pressed on issues ranging from soaring inflation to the Biden administration’s stalled legislative agenda. When asked about the chances of an economic contraction, Bernstein pointed to a strong labor market and high consumer spending.
“It is very hard to conclude that we are in a recession when you look at the payroll and the job gains that we’ve seen now, it is tricky to look around the corner here, and I’m not going to predict quarters down the road,” he argued. “But I think right now, you’ve got inflation headwinds big time in this economy — not taking anything away from that — but you also have some very strong tailwinds that are boosting consumers.”
Rather than true economic growth, inflationary pressures are likely inducing the higher expenditures from American households, with many dipping into savings to make ends meet as consumer confidence plummets to its lowest level in seven decades. Meanwhile, the labor force participation rate — the percentage of people who either have a job or are actively looking for one — has not recovered since the recession, likely worsening inflation.
With respect to recessionary risks, the United States economy shrank at a 1.5% annual rate during the first quarter of 2022, according to a report from the U.S. Bureau of Economic Analysis. Although data for the second quarter has not yet been released, the Federal Reserve Bank of Atlanta is forecasting that the economy continued to contract at a 1.5% pace. A recession is defined by two consecutive quarters of negative growth.
Last month, President Biden likewise claimed during an interview that a recession is “not inevitable” and said Americans “shouldn’t believe” economists’ warnings.
Sen. Joe Manchin (D-WV) provoked frustration last week from Democratic leadership after he “unequivocally” refused to support any new provisions related to climate change and tax increases. Bernstein added that Biden is willing to “take the executive order and rule change path” in order to advance his agenda if there is “no legislative path forward.”
“This president has tackled aggressively climate change measures already,” Bernstein said. “He has set the most rigorous emissions standards yet to be set in this country, and he has helped to jumpstart the offshore wind industry. Now, those are all measures that he took by the power of the pen through executive action and rule changes. And he will continue to do that.”
Energy costs have driven high inflation, with prices at the pump reaching $5.00 per gallon in early June before falling to a national average price of $4.52 as of Monday, according to AAA. While Biden has prioritized green energy measures such as electric vehicles, he has also drawn criticism for considering a breach of four key dams in the Pacific Northwest to preserve salmon populations.
In response to recent questions about “enormously high gas prices,” Biden argued that the phenomenon will cause a faster transition to green energy. “When it comes to the gas prices, we’re going through an incredible transition that is taking place that, God willing, when it’s over, we’ll be stronger and the world will be stronger and less reliant on fossil fuels when this is over,” he commented.
Biden recently drew criticism for traveling to Saudi Arabia — an Islamic nation he once promised to make a “pariah” in the global community due to its human rights abuses — to urge an increase in oil production.
Source: Dailywire
