President Joe Biden has tools at his disposal that can fight inflation without doing too much damage to the economy.
Is America heading into a recession? Rising inflation, stagnant economic growth, and dramatically falling stock values suggest yes. But the continued job gains suggest that the economy is steadfastly holding off a decline.
Specifically, the economy added 372,000 jobs in June, holding the unemployment rate at 3.6% — just 0.1% away from tying the lowest level in 52 years. Job growth has leveled off at a pace that would come to 4 million annually, and employers report 11.3 million job openings, which is nearly double the 5.9 million Americans actively seeking work.
At the same time, the gross domestic product (GDP) declined in the first quarter, and is forecast by some to decline again in the second quarter. While the panel that classifies recessions examines multiple economic variables, each past instance of two consecutive quarters of declining GDP has been classified as a recession. How do we square the declining GDP and rising jobs data?
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Brian M. Riedl is a senior fellow at the Manhattan Institute. Follow him on Twitter here.
This piece originally appeared in New York Post