Biden avers US economy 'on right path' & job market 'remains strong' despite GDP drop

US President Joe Biden has stated that the country's job market continues to remain "strong" with unemployment rate at 3.6% and the creation of more than one million jobs in the second quarter alone. In his statement on the second quarter GDP report, Biden stressed that the US economy was "on the right path" despite the recession fears raised by the latest report issued by the Commerce Department. As per the report, the US economy shrank again in the second quarter from April through June. 

"Even as we face historic global challenges, we are on the right path and we will come through this transition stronger and more secure. Our job market remains historically strong, with unemployment at 3.6% and more than 1 million jobs created in the second quarter alone," US President Joe Biden said in a statement. 

Biden said it is "no surprise" that the US economy was slowing down as the Federal Reserve has been working to bring down inflation, according to the statement released by the White House. He insisted that consumer spending in the United States continues to grow. He spoke about his meeting with the chairman of SK Group from Korea earlier this week and emphasised that it is "just one of the companies investing more than $200 billion in American manufacturing since I took office, powering a historic recovery in American manufacturing." Furthermore, US President Joe Biden stated that his economic plan is focused on bringing inflation down without the need to give up all the economic gains made by the US. Biden's statement came just days after he said that the US economy is "not going to be in recession." He further said, "But I don’t think we’re going to — God willing, I don’t think we’re going to see a recession." 

US GDP falls in second quarter

Biden's statement comes after the US Commerce Department released a report showing that the nation's gross domestic product (GDP) fell at a 0.9% annual rate. The decline in the GDP followed a 1.6% annual drop witnessed from January through March. The decrease in real GDP shows a drop in private inventory investment, residential fixed investment, federal government spending, state and local government spending, and nonresidential fixed investment, according to the press release issued by the US Bureau of Economic Analysis. The Bureau of Economic Analysis noted that the decrease in private inventory investment has been caused by a decrease in retail trade. Furthermore, the decrease in residential fixed investment has been caused due to drop in "other" structures, including broker commissions. According to AP, the report comes at a time when consumers and businesses have been struggling due to inflation and higher loan costs. 

Image: AP