White House Director of the National Economic Council Brian Deese said Monday that the “slowing” of the economy is “necessary” as the economy undergoes a transition while speaking on MSNBC.
Deese was discussing how oil and gas prices are slowly beginning to fall after reaching record-highs.
“You just talked about the price of oil and gasoline coming down,” host Andrew Ross Sorkin said. “That is a good thing, but one of the reasons that is happening is because of fears of a recession.”
Deese then cited Citi CEO Jane Fraser, who said that little in the data suggests we are heading in a recession. Deese said despite global inflation challenges and the war in Ukraine, there are steps that could be taken to alleviate the burden Americans are feeling.
“We can take policy steps that would help provide relief to consumers and also increase the likelihood that we could transition to a steady state of growth without giving up all of the economic gains that we’ve had. So, as we look forward, our focus is on the policies that would actually help to advance this ball,” he said.
“Part of the story is we’ve been working to put a million barrels a day of oil from our strategic reserves on the market,” he added. “We’re working to try to get a global price cap for Russia’s oil so we increase supply on the market but decrease revenue to Putin, all of these steps are contributing as well.”
“Could you explain to the American public how the Biden administration defines a recession and what are the economic indicators that the Biden administration is looking at that would mean we are getting in that territory?” one host asked.
“The president defines his economic objective at core as making sure that middle class families can operate a life with dignity and have a little bit of economic breathing room, that is true since the first day that he’s been in office and we’ve made a lot of progress on that score. When we look at a recession, we leave the technical definition to the NBER,” Deese said. (RELATED: The White House Wants To Redefine ‘Recession’ Ahead Of Possibly Disastrous GDP Report)
“But what we’re looking at is: do we have a labor market where people could get better jobs with higher wages? Are consumers continuing to spend and are businesses and households continuing to invest? Across all of those scores, we’re seeing resilience — we are seeing a slowing. That is not only expected but necessary as we operate through this transition,” he continued. “So, that’s where our — our focus is in terms of diagnosing the economy. But equally important is prescribing. We need to do more to lower prices for people right now — energy, prescription drugs, other areas, we could make a lot of progress right now. The more progress we make, the more likely it is that we could make this transition as I said without giving up the economic gains we’ve made.”
The White House has tried to redefine what constitutes a “recession” amid concerns the upcoming GDP report will show a second straight quarter of negative numbers. Economist Julius Shiskin wrote in 1974 that two consecutive quarters of declining GDP is a good rule of thumb to define a recession. The definition is used frequently, though the National Bureau of Economic Research uses several other factors to determine whether the U.S. is in a recession.
In a July 21 blog post, the White House Council of Economic Advisers said two consecutive quarters of falling real GDP doesn’t necessarily indicate a recession and that the data is unlikely to show the U.S. is headed toward a recession.
Deese reiterated the point Monday morning on CNN, saying “in terms of the technical definition it’s not a recession” because the real definition “considers a much broader spectrum of data points.”