When there’s good economic news to share, the White House tends not to waste any time, and this morning was no exception. “For months, doomsayers have been arguing that the US economy is in a recession and congressional Republicans have been rooting for a downturn,” President Biden said in a written statement. “But today we got further evidence that our economic recovery is continuing to power forward.”
The Democrat’s positive attitude was understandable. Despite significant headwinds, the economy started growing again over the summer, and as NBC News reported, the new GDP data looked even better than expected.
The U.S. economy posted its first period of positive growth for 2022 in the third quarter, at least temporarily easing inflation fears, the Bureau of Economic Analysis reported Thursday. GDP, a sum of all the goods and services produced from July through September, increased at a 2.6% annualized pace for the period, against the Dow Jones estimate of 2.3%.
In the first and second quarters of the year, the economy contracted a bit, sparking overwrought political chatter about whether the country had dipped into a “recession.” That hasn’t happened — at least not yet — and the data released this morning should bring that conversation to a close.
Indeed, while inflation clearly casts a long shadow over the economy, there’s plenty of evidence that points to an ongoing recovery. As Biden boasted, accurately, “Our economy has created 10 million jobs, unemployment is at a 50 year low, and U.S. manufacturing is booming. Today’s data shows that in the third quarter, Americans’ incomes were up and price increases in the economy came down.”
Before noting the Republican reactions to the news, let’s note for context that three months ago, when the Bureau of Economic Analysis reported that gross domestic product fell 0.6% in the second quarter, it took House Minority Leader Kevin McCarthy just 22 minutes to announce that the United States was “in a recession.” The California Republican took the same message to the airwaves about an hour later.
As we’ve discussed, around the same time, Senate Minority Leader Mitch McConnell did the same thing, seizing on the data he found politically convenient to denounce Democratic governance.
The reasoning followed a trajectory intended to mirror common sense: There’s a Democratic president and Democratic congressional majorities; there’s some discouraging economic news; therefore the public should blame the party in power.
But three months later, in the midst of an election season, economic growth is looking pretty good, and job growth is even better. GOP leaders had literally nothing to say a few weeks ago when the unemployment rate matched a 50-year low, and those looking for them to respond to today’s good news were left wanting.
As of this minute — more than four hours after the GDP figures were released to the public — the collective number of statements this morning about economic growth from McCarthy, McConnell, and the Republican National Committee is zero.
Postscript: It’s worth clarifying that today’s 2.6% quarterly figure refers to growth at an annualized rate, which is the standard way of reporting the data. In other words, if we saw 12 months of economic activity like what we saw in the fourth quarter, the economy would grow by roughly 2.6%.
You may also see some focus today on a different figure: 0.6%, which reflects the change between the second quarter and the third quarter.