President Biden's Economic Adviser Addresses Americans' Burning Questions About Possible Recession

Tom Williams/CQ-Roll Call, Inc via Getty Heather Boushey

The U.S. economy shrank for a second consecutive quarter, according to a Bureau of Economic Analysis report released Thursday. And while consecutive quarters of negative growth would typically signify a recession, there's nothing typical about the current state of the economy.

Officially, the National Bureau of Economic Research declares recessions. So far, it hasn't said the U.S. economy is in one. The Biden administration is also wary of throwing around the "R" word, says economist Heather Boushey, a member of the White House Council of Economic Advisers.

"I am an economist. I work for the president of the United States. I get up every day worried about a recession because I want to make sure families have access to the kinds of jobs that will create economic security," Boushey tells PEOPLE. "And we understand that high prices and inflation is hard on families, it causes chaos."

But Boushey points to positive economic indicators that she says show the U.S. economy is not in recession — unemployment, for one. "We know that having low unemployment is the first piece of economic security," she says, adding that there are other bright spots, like "44 days of consistently falling gas prices in the United States."

We spoke to Boushey for more on the current state of the economy and what, exactly, constitutes a recession.

Historically, two consecutive quarters of negative growth would constitute a recession. Are we in one now?

When we are looking at whether or not the economy is in a recession, there is a wide array of indicators that the National Bureau of Economic Research — which is this outside entity, they're not part of government — uses to determine whether or not the economy is experiencing significant downturns. Of course today, we got new data showing GDP declined for the second quarter, but there's also a variety of data that shows the economy in many ways remains steadfast or strong.

So what economic indicators signal that we aren't in a recession?

We continue to see strong gains in employment, to the tune of about 375,000 jobs on average [per month] in the last few months. We don't typically start recessions with that kind of robust job gain. It would be highly unusual for the whole economy to be experiencing a downturn while adding so many jobs, month after month.

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What does the latest GDP report show us?

Today's news does show us that there's been a slowdown in economic activity. It shows that government spending has fallen, it shows that investments in new homes, new residential construction, has fallen. And it also shows us that businesses are building up their inventories slower than they were in the first quarter.

It remains the case that consumers are continuing to spend and, on top of other data, this does not necessarily indicate that we are in a recession right now.

What will indicate a recession?

We would be seeing a slowdown across all our economic indicators ... but I do think it's important to understand what we're talking about here. This isn't to say that families aren't struggling, that even though the unemployment rate is 3.6%, the president is acutely aware of the pain families feel because of inflation. That's why he's focused so much on getting prices down. And quite frankly that's why we're so excited with this announcement of a deal on Capitol Hill to move forward with legislation in the coming days that would lower prices on really important pain points for families like healthcare and energy costs.

What is the Biden administration doing to ensure we don't see more dismal economic indicators in the future?

The president has been focused since he took office on an economic recovery that can be strong, stable and broadly shared. ... I think in the coming days what the president is focused on is two significant pieces of legislation. One would make it easier for firms to invest here in America in silicon chips that are now part of everything we buy, from cars to refrigerators ... lack of access to these chips has been part of the inflation problem.

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We're also very excited [about the] Inflation Recovery Act of 2022 that would focus on these key pain points for families: healthcare, prescription drugs, making sure that our tax system is fair and important. Making sure we put ourselves on the path for clean energy. This really important legislation that is exactly focused on making sure we are shoring up the economy we have today.

This deal would reduce the deficit by making sure corporations pay their fair share of taxes by having a 15% minimum tax. No longer will companies be able to get away with not paying their fair share because they have too many deductions. The legislation will also ensure the IRS has resources to make sure that those at the top pay the taxes they owe. That can bring in a lot of tax revenue.

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What are some of the bright spots?

The president came in with a plan and has been executing on that plan. Under his watch, we've added over 9 million jobs in the United States. That is an historic accomplishment. We pulled ourselves out of the dark days of the economy and got people back to work. It's been a faster recovery than any recession in recent memory.

Now, we understand where some of the challenges are — that supply chains are so fragile, that our reliance on foreign oil markets makes our economy vulnerable. The president has a plan for that. We have seen results and we will continue to see results.

When we talk about spending and consumers, I know one big concern for many Americans is student loan debt. Is the president still working on a plan to cancel some student loan debt for Americans?

The president is still working on that. He's already taken a number of steps to lower the burden of student debt on families and making sure that system is fair.

Editor's note: Speaking to reporters last week, Biden said that he will make a decision on how to handle student loans by the end of August.