TOMMY NATION POLITICS: "The Side-Step..."

President Biden has a new headache: He can't avoid the debate over whether the U.S. is in a recession, but if he dwells on it, he may hasten the very slowdown he's desperate to avoid...

In economics, psychology matters. If the country and consumers believe we're in a recession — even if we technically aren't — the economy will eventually slow down, turning Biden's inflation problem into a potential stagflation nightmare.

Presidents can't talk their way out of an economic downturn, but they do have a unique ability to set the general tone of the country. Biden, like his predecessors, likes to accentuate positive economic data.
But with a 9.1% inflation rate and potentially two quarters of negative GDP growth, Biden can’t push the glass-half-full argument too far. His initial sanguine call on inflation — insisting it would be short-term — has already eroded some of his credibility.
Driving the news: On Thursday, the Commerce Department will release the initial GDP numbers for the second quarter of 2022, with economists expecting a 0.5% increase. Still, there are plenty of worrying signs: the Atlanta Fed’s "nowcast" model suggests GDP growth will come in at -1.6%.

Biden officials have been pre-butting the numbers and challenging the yeoman's definition that a recession is two consecutive quarters of negative economic growth, as Axios' Neil Irwin reported last week. "Certainly, in terms of the technical definition, it is not a recession," Brian Deese, the director of the National Economic Council, said on CNN on Monday morning.
What they're saying: Biden on Monday again downplayed the recession risk...

"My hope is we go from this rapid growth to steady growth and so we'll see some coming down," he said.
"But I don't think, God willing, we're going to see a recession," he said. "I'll be surprised."