Biden’s take came as the International Monetary Fund, a global lender, downgraded its outlook for the global economy and warned of the buildup of “storm clouds” – including a “persistent” inflation, the fallout from the war in Ukraine and a slowdown in the Chinese property market affecting the global economy.
JPMorgan Chase chief executive Jamie Dimon also told CNBC this week that the United States is likely to tip into recession “within six to nine months,” although right now “it’s still doing well.” good”. He added: “It’s something serious.”
A recession is technically defined as two quarters, or six months, of negative economic growth. However, the National Bureau of Economic Research, the official arbiter of U.S. recessions, looks for other signs such as “significant” and widespread declines across the economy, including in the employment rate, spending on consumption and other factors.
Biden, however, said financial experts often make predictions. “Every six months they say that,” he said, but that “hadn’t happened yet.”
“We are in a better position than any other major country in the world – economically and politically,” he continued. “We still have real problems,” he added, but he said recent laws such as the nearly $2 trillion US bailout and the Inflation Reduction Act have had a lot of impact. accomplished.
What is a recession? Answers to your economic questions.
As international headwinds continue to weigh on the global economy, the 190 members of the IMF predict that global growth will slow from 6% in 2021 to 3.2% in 2022 and 2.7% in 2023 – the fastest growth weak since 2001, he said on Tuesday, except for the global financial crisis and the acute phase of the coronavirus pandemic.
“The three largest economies, the United States, China and the euro zone, will continue to stagnate,” Pierre-Olivier Gourinchas, the IMF’s chief economist, told reporters. “In short, the worst is yet to come, and for many people, 2023 will look like a recession.”
Gourinchas said countries accounting for a third of global production are expected to “shrink” this year or next. In the United States, it tweetedrising interest rates could slow growth to 1% in 2023 from 1.6% this year.
Overall it wrote, “inflation remains the most immediate threat to current and future prosperity by compressing real incomes and undermining macro stability.” He urged central banks around the world to “keep a firm hand with monetary policy firmly focused on controlling inflation.”
This morning, I presented our analysis of the global economy. Russia’s war in Ukraine, the cost of living crisis and the slowdown in China are the main reasons why we are reducing growth to 3.2% in 2022 and 2.7% in 2023. https:// t.co/rV7PnlIg55 (1/5) pic.twitter.com/XZLSWB5jq6
— Pierre-Olivier Gourinchas (@pogourinchas) October 11, 2022
Biden said he knows families are worried about the rising cost of energy and medicine and are looking for “wiggle room” with the economy set to be the focus of the upcoming midterm elections.
White press secretary Karine Jean-Pierre said Wednesday that the president’s comments in Tuesday’s interview did not mark a change in perspective.
“We take this unique global economic moment very seriously,” said Jean-Pierre. “And the president wants the American people to know that because of America’s resilience and the president’s economic plan that we’ve seen throughout the [past] 20 months, we are in a stronger position than any other country to meet these global challenges that we see before us.
US job growth slowed again in September, a sign that the labor market may be cooling from its scorching peak earlier this year, although there remains an area of strength for a sagging US economy. braces for a downturn. The Federal Reserve also raised interest rates five times since March, moving at an aggressive pace to rein in inflation and balance the economy. Nevertheless, some financial experts warn that a recession and pain awaits American families and businesses.
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As the war in Ukraine enters its eighth month, the decision by a coalition of oil-producing nations led by Russia and Saudi Arabia last week to cut oil production by 2 million barrels a day, in a rebuke to Biden, also deepened fears. of a global recession. The White House said Tuesday that Biden was reassessing the United States’ relationship with Saudi Arabia following the OPEC Plus announcement.