CNN White House Correspondent John Harwood’s 2019 tweet is coming back to haunt him as he tries to dismiss fears about an impending recession.
Harwood retweeted a post from Ben White, who said “the White House is pretty obviously right that even two quarters of shrinking GDP would not show the economy is currently in recession. Getting people to understand that and the nuances of our strange, vexing, economic moment is just really hard. By me.”
The White House is pretty obviously right that even two quarters of shrinking GDP would not show the economy is currently in recession.
Getting people to understand that and the nuances of our strange, vexing, economic moment is just really hard. By me.https://t.co/SWyuSG2IMS
— Ben White (@morningmoneyben) July 27, 2022
Harwood also retweeted a claim from Paul Krugman who said “ignore the two-quarter rule.”
“We might have a recession, but we aren’t in one now.”
Ignore the two-quarter rule. We might have a recession, but we aren’t in one now https://t.co/48qpo9uoQL
— Paul Krugman (@paulkrugman) July 27, 2022
Harwood then retweeted a claim from Marc Goldwein who said “no, 2 quarters of negative economic growth does not mean we’re in a recession.”
1) no, 2 quarters of negative economic growth does not mean we’re in a recession
2) just because we’re not in a recession, doesn’t mean the economy is doing great —- it’s not.
— Marc Goldwein (@MarcGoldwein) July 26, 2022
Despite Harwood’s several retweets that the U.S. is not heading toward a recession due to the apparent redefinition, Harwood himself tweeted the exact opposite nearly three years ago.
“btw it’s not possible for a recession to last only two months,” Harwood tweeted. “Recession=economy shrinks for two quarters.”
btw it’s not possible for a recession to last only two months
recession = economy shrinks for two quarters
— John Harwood (@JohnJHarwood) August 20, 2019
The White House Council of Economic Advisers claimed in a July 21 blog post that two consecutive quarters of falling GDP is not indicative of a recession. (RELATED: Economist Dismantles Biden Admin’s Attempt To Redefine Recession With One Chart)
“While some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle,” the blog post said. “Instead, both official determinations of recessions and economists’ assessment of economic activity are based on a holistic look at the data – including the labor market, consumer and business spending, industrial production, and incomes.”
“Based on these data, it is unlikely that the decline in GDP in the first quarter of this year – even if followed by another GDP decline in the second quarter – indicates a recession.”
The National Bureau of Economic Research uses several factors to determine whether the U.S. is in a recession, though economist Julius Shiskin wrote in 1974 that two consecutive quarters of declining GDP is a good rule of thumb when defining a recession. The definition has become somewhat of a standard since.