CNN analysis: Biden facing 'moment of truth' this week with release of critical economic data
Larry Summers said Sunday that a recession was very likely
{{#rendered}} {{/rendered}}A CNN analysis said Monday that President Biden was facing a "moment of truth" this week with regard to the economy as multiple key economic reports are expected to come out this week.
"Every week is a tough week for this White House right now," CNN's Stephen Collinson and Simone Pathe wrote, adding that the reports on "US economic health and consumer prices" will "offer a glimpse of how bad things could get."
The analysis noted a CNN survey that found just 18% of Americans said the economy was in good shape.
{{#rendered}} {{/rendered}}The White House said Sunday that a second quarter of a negative GDP was "unlikely" to be indicative of a recession.
SINCE BIDEN ADMIN CALLED INFLATION ‘TRANSITORY’, US HAS SEEN 13 STRAIGHT MONTHS OF SOARING COSTS
President Joe Biden delivers remarks on the grounds of Morehouse College and Clark Atlanta University in Atlanta, Georgia, Jan. 11, 2022. (Reuters/Jonathan Ernst)
The Consumer Confidence Index, which shows consumer attitudes and expectations looking at the economy, is set to come out on Tuesday, and the Personal Consumption Expenditures Price Index, which looks at the changes in the prices of goods purchased by consumers, will be released on Friday.
{{#rendered}} {{/rendered}}Inflation rose 9.1% in June, reaching another 40-year high. Biden and many of his advisers said the data was "out of date" because gas prices had come down in recent weeks.
The analysis said that if the economic data set to be released suggests the U.S. is nearing or very close to a recession, it would mean "another round of bad headlines" for the president and more positive messaging for the GOP ahead of the midterms.
BIDEN UNDER FIRE FOR HYPING FALLING GAS PRICES, WHILE INFLATION GROWS
{{#rendered}} {{/rendered}}A customer shops at a Sam's Club store, a division of Wal-Mart Stores, in Bentonville, Arkansas, June 4, 2009. (Reuters/Jessica Rinaldi)
"And even if this week’s data suggest that the economy isn’t heading for a recession, it will still be a hard sell for the White House. Any president arguing that the economy isn’t really as bad as it feels to voters is in trouble," Collinson and Pathe wrote.
Treasury Secretary Janet Yellen said Sunday that the economy is "slowing down," but downplayed the possibility of a recession. "You don't see any of the signs now – a recession is a broad-based contraction that affects many sectors of the economy. We just don't have that," she said on "Meet the Press." "I would say that we're seeing a slowdown."
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{{#rendered}} {{/rendered}}Treasury Secretary Janet Yellen testifies during the House Financial Services Committee hearing in Washington, Sept. 30, 2021. (Sarah Silbiger/Pool via Reuters)
Larry Summers, an economic adviser for former president Barack Obama, said Sunday that a recession was very likely.
"I think there is a very high likelihood of recession. When we’ve been in this kind of situation before, recession has essentially always followed. When inflation has been high and unemployment has been low, soft landings represent a kind of triumph of hope over experience. I think we’re very unlikely to see one," Summers said.