WASHINGTON, July 26 ― President Joe Biden said yesterday he does not expect the United States suffer an economic downturn, although GDP figures due later this week may show the economy shrinking for a second consecutive quarter.
“We're not going to be in a recession in my view,” Biden told reporters.
Citing strong employment figures, the president said he hoped instead for a soft landing where “we go from this rapid growth to steady growth.”
Multiple US officials have downplayed rising recession fears, saying a downturn in the world's largest economy is unlikely given the very tight labour markets.
Recent figures suggest GDP might have fallen in the second quarter, following a 1.6 per cent decline in the first three months of the year, but the consensus forecast among economists still calls for slight growth.
The first-quarter contraction was worse than expected and the first since 2020 when the pandemic was at its worst.
The economy, meanwhile, is bracing for the Federal Reserve to make its next move to fight inflation tomorrow, likely by increasing interest rates by another three-quarters of a percentage point in an effort to slow demand.
Fed Chair Jerome Powell has said it is “essential” to lower inflation, but stressed that the goal is to achieve that without derailing the US economy.
After a rapid economic recovery last year, Biden has seen his approval ratings plummet in recent months as American families have struggled to make ends meet amid surging inflation. ― AFP