Biden and Yellen are wrong about the economy.
The economy contracted in both the first and second quarters of this year. Ordinarily, everyone would accept that we are in a recession. The Biden administration denies that we are in a recession. President Biden and Treasury Secretary Yellen insist that rising employment and a low official unemployment rate outweigh the contraction in real wealth production, in determining whether we are in a recession. As Yellen put it, “the labor market remains exceptionally strong”.
We should note two facts. First, employment grew in the first six months of this year, but it is still below it's pre COVID trend.
Second, the fact that Americans produced less wealth with more workers indicates a decline in labor productivity. Labor productivity fell dramatically in the first quarter of this year. It seems that the productivity decline of the second quarter of this year is smaller, but back-to-back productivity losses are unusual. Yellen implicitly assumes that job losses matter, but labor productivity losses don't. Low unemployment rates are a sign of market efficiency. But productivity increases drive real long-term economic progress. Yellen's focus employment gains and unemployment rates is short sighted, likely driven by short term political worries. There is a strong case for emphasizing productivity over employment, though it might be best for experts to remain neutral on this issue, and just report all relevant facts.
We have been in a recession since January, far too soon after the COVID-19 crisis. There are serious problems in the economy. Biden's policies have backfired badly. Biden should quit playing his semantic games, and implement better policies.