(CNSNews.com) – Sen. Charles Schumer (D-N.Y.) and leading Senate Democrats told CNSNews.com on Tuesday that the U.S. economy is in a recession despite the fact that the economy grew by 3.3 percent during the second quarter of fiscal year 2008.
Congressional Republicans, however, said that the United States is not in a recession, and one congressman suggested that Democrats are downplaying the state of the economy to increase their chances in the elections in November.
“I think if you ask the average middle-class American, they would clearly say we are in a recession,” Schumer told CNSNews.com.
Sen. Robert Casey Jr. (D-Pa.) said, “Oh, I think we have been in a recession.”
“Absolutely – we are absolutely in a recession,” Sen. Debbie Stabenow (D-Mich.) told CNSNews.com. “In Michigan we have 8.5 percent unemployment.”
But Sen. Judd Gregg (R-N.H.) told CNSNews.com that the economy is not in a recession.
“No. Obviously we are not in a technical recession,” he said. “The term has a technical definition, which is two quarters of negative growth, and we are certainly not there.”
Data released by the government’s Bureau of Economic Analysis (BEA) showed that the real Gross Domestic Product (GDP) rose by 3.3 percent during the first quarter of 2008, which spanned from January 2008 to March 31. During the last quarter of 2007, which spanned from October to December 2007, the economy grew by 0.9 percent.
On Wednesday, Sept. 3, Andrew Hodge, head of profit research at the BEA, told CNSNews.com that the U.S. economy has not yet met the definition of a recession.
Hodge also said that though there are different ways to define recession, it is most commonly defined as two consecutive quarters of negative growth.
“We haven’t strung two negative GDP quarters together yet, and really, you need two of those to call it a recession,” said Hodge. “Around the world people generally define recession as two negative GDP quarters.”
But, according to Casey, the definition of recession does not apply to the U.S. economy in this case.
“I think that some of the old definitions don’t apply,” Casey told CNSNews.com. “Sometimes definitions don’t make sense for the reality. Sometimes the definition doesn’t tell the whole story.”
And Sen. Kent Conrad (D-N.D.) said the reported rise in GDP is not a significant indicator of the health of the economy.
“I don’t think it [the rising GDP] tells you much, because what the government is alerting us to is that growth is going to slow dramatically in the second half of this year and into next year,” said Conrad.
When CNSNews.com asked Rep. Paul Ryan (R-Wis.) if he thinks Democratic presidential candidate Barack Obama and the mainstream media are focusing on negative aspects of the economy to gain traction for the elections, he answered, albeit sarcastically, “In an election year? That never happens.”
The GDP is the estimated value of all goods and services produced in the United States. The federal Bureau of Economic Analysis had earlier estimated that second quarter growth would equal 1.9 percent but was compelled to adjust its estimate to 3.3. percent after analyzing the GDP indicators.