US Treasury officials scramble to find evidence the economy is not in recession

Q2 GDP from the US is due on Thursday.

Reuters polling shows that despite the consensus being for q/q growth 28% of the respondents are predicting a contraction.

Ben Harris, Treasury assistant secretary for economic policy and Neil Mehrotra:

• said while second quarter GDI data will not be available until the end of August, some GDI components, including employee compensation, proprietors income and rental income, show increases for the quarter. Tax receipts also suggest strong corporate income growth, the officials added.

• “To get an accurate real-time read on the economy, economists need to look across several measures of economic activity to infer the true pace of growth,” they wrote, adding that GDI has recovered significantly faster than GDP over the pandemic period.

I noted yesterday that there is a never-ending debate amongst economists and non-economists about what a recession is. Some of the debate is well intentioned. Some of it is politically inspired. I’d suggest these two Treasury officials are well-intentioned but I am sure others would disagree.