How strong is the US economy? Depends on which party you ask

theguardian.com:

The Republican chair of the Federal Reserve doesn’t think it’s happening. Neither does the Democratic president, Joe Biden, nor do a good number of economists.

And yet, many Americans appear to believe the world’s largest economy is in a recession, creating yet another liability for Biden in the run-up to November’s midterm elections, where voters are already inclined to hand Republicans control of at least one chamber of Congress.

The case for the country experiencing a contraction was bolstered on Thursday when the Bureau of Economic Analysis reported the economy shrank for the second straight quarter, a worrying data point that doesn’t satisfy the technical definition of a recession, but nonetheless underscores the damage done by snarled global supply chains and America’s continuing bout of high inflation.

“It suggests, overall, the economy is weakening, it’s certainly losing steam, where there are storm clouds not only on the horizon but we’re entering them right now,” said James W Hughes, dean emeritus of the Edward J Bloustein School of Planning and Public Policy at Rutgers University. “But I don’t think it’s clear whether we’re in a recession right now.”

Biden attempted to downplay the data after its release, saying that a growth slowdown is “no surprise” after the US economy expanded rapidly last year and made up ground from the record collapse caused by Covid-19 in 2020.

“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 said in a statement that called for the passage of the Inflation Reduction Act, a compromise bill Democrats announced this week to fund party priorities such as lowering healthcare costs and fighting climate