President Biden reacted to Thursday’s GDP report, saying it is “no surprise that the economy is slowing down” amid inflation, despite saying earlier this week that the United States would not be entering a recession.
The US economy shrank in the spring for the second consecutive quarter, meeting the criteria for a recession as record-high inflation and higher interest rates forced consumers and businesses to pull back on spending.
Gross domestic product, the broadest measure of goods and services produced across the economy, shrank by 0.9% on an annualized basis in the three-month period from April through June, the Commerce Department said in its first reading of the data on Thursday. Refinitiv economists expected the report to show the economy had expanded by 0.5%.
“Coming off of last year’s historic economic growth – and regaining all the private sector jobs lost during the pandemic crisis – it’s no surprise that the economy is slowing down as the Federal Reserve acts to bring down inflation,” Biden said in a statement Thursday. “But even as we face historic global challenges, we are on the right path and we will come through this transition stronger and more secure.”
Biden touted the job market, saying it “remains historically strong, with unemployment at 3.6% and more than 1 million jobs created in the second quarter alone.”
“Consumer spending is continuing to grow,” Biden said.
Biden said he met with Chairman of SK Group from Korea earlier this week, saying it is “just one of the companies investing more than $200 billion in American manufacturing since I took office, powering a historic recovery in American manufacturing.”
“My economic plan is focused on bringing inflation down, without giving up all the economic gains we have made,” Biden said. “Congress has an historic chance to do that by passing the CHIPS and Science Act and Inflation Reduction Act without delay.”
This is a developing story. Check back for updates.