US Treasury Secretary Janet Yellen has denied that the American economy is in recession, even though a report this week may confirm it by the most common definition, saying the nation is instead going through a “necessary and appropriate” slowdown.
Yellen defended President Joe Biden’s economic policies in an NBC News interview on Sunday, arguing that a negative GDP report won’t mean that the world’s largest economy is in recession. The report is scheduled for release on Thursday and, following first-quarter contraction at an annual rate of 1.6%, the latest data may confirm that the economy is shrinking.
Two straight quarters of economic contraction is typically viewed as a recession, Yellen acknowledged, but she tried to reframe how the trend should be defined. “We could see that happen, and that will be closely watched, but I do want to emphasize: What a recession really means is a broad-based contraction in the economy,” she told host Chuck Todd. “Even if that number is negative, we are not in a recession now. I would warn that we should be not characterizing that as a recession.”