As politicians debated the definition of a “recession,” Treasury Secretary Janet L. Yellen said Thursday that arguing about semantics was not particularly useful.
"I think we should avoid a semantic battle. I've tried to do that in my remarks today," Yellen said at a news conference that followed the report that growth in the gross domestic product was negative for the second consecutive quarter.
That's traditionally been a sign of a recession, and many Republicans quickly took to using the word along with President Joe Biden's name and his party's in referring to the current state of the economy.
“I don't know a president who drove an economy faster into the ground — and into a recession — than Joe Biden. This report shows zero percent growth for consumer spending and for home and business investment — the main drivers of economic growth — the weakest since the pandemic recession," House Ways and Means ranking member Kevin Brady of Texas said in a statement.
And, in response to the numbers from the Bureau of Economic Analysis, Senate Minority Leader Mitch McConnell said, "Of course, working families didn’t need any experts or statistics to tell them today’s Democratic Party is a walking, talking economic disaster. Democrats’ failures are causing working families deep personal pain on a daily basis."
Yellen, asked about polling suggesting people believe there is a recession, pointed to another root cause for the dissatisfaction with the economy.
"I think their biggest concern is with inflation and high prices that they feel they can't afford to put gas in their gas tank, and people are worried about their retirement savings and whether or not they'll have enough to retire," Yellen said. "Now, sometimes people use the word recession to refer to that, that's really about inflation."
Yellen and others in the Biden administration have noted the ongoing tightness in the labor market as being inflationary.
The latest GDP numbers came out one day after Senate Majority Leader Charles E. Schumer and Sen. Joe Manchin III of West Virginia announced they had reached agreement on a budget reconciliation measure combining elements of health care, energy and tax policy that Democrats including Biden are hailing as a way to counter inflation.
Biden on Thursday outlined the Schumer-Manchin deal, including provisions designed to lower health care costs.
“It will be the most important investment — not hyperbole, the most important investment we've ever made in our energy security and developing cost savings and job creating clean energy solutions for the future,” Biden said. “It's a big deal.”
At a roundtable later in the day with participation from key members of his administration and several CEOs, the president said, “households and businesses, the engines of our economy, continue to move forward.”
Marriott International CEO Tony Capuano, one of the executives joining the president’s roundtable, talked about the ongoing increase in demand in the travel sector.
“There continues to be deep pent-up demand as a result of the pandemic,” Capuano said. “I think there’s a bit of a psychographic shift away from consumption of hard goods towards investment in experiences, which is helping our business.”