On July 28, the Bureau of Economic Analysis released the second quarter GDP report, which showed, "Real gross domestic product (GDP) decreased at an annual rate of 0.9 percent in the second quarter of 2022, following a decrease of 1.6 percent in the first quarter."

Among the "highlights" of the report, "The second quarter decrease in real GDP reflected decreases in inventory investment, housing investment, federal government spending, state and local government spending, and business investment.  Exports and consumer spending increased.  Imports, which are a subtraction in the calculation of GDP, increased."

And, perhaps most importantly, the report documented, "Real disposable personal income (DPI) — personal income adjusted for taxes and inflation — decreased 0.5 percent in the second quarter."

In other words, the second-quarter GDP numbers were abysmal across the board.  Moreover, according to the classic definition of a recession — two consecutive quarters of negative GDP growth — the report confirms that the U.S. economy has entered into a recession.

Of course, the bad economic news comes on the heels of the Biden administration's recent attempts to redefine what constitutes a recession.

Over the past several days, in anticipation of the report's release, several high-ranking Biden administration officials have been all over the airwaves trying to convince the American people that two consecutive quarters of negative GDP growth does not constitute a recession.

For instance, Treasury secretary Janet Yellen explained on NBC's Meet the Press that "a common definition of recession is two negative quarters of GDP growth, or at least that's something that's been true in past recessions.  When we have seen that, there has usually been a recession.  And many economists expect second-quarter GDP to be negative.  First-quarter GDP was negative, so we could see that happen, and that will be closely watched.  But I do want to emphasize — what a recession really means is a broad-based contraction in the economy.  And even if that number is negative, we are not in a recession now, and I would, you know, warn that we should be not characterizing that as a recession."

White House press secretary Karine Jean-Pierre claimed, "The textbook definition of 'recession' is not — is not two negative quarters of GDP.  We have a strong labor market.  We have business that's investing.  We have consumers that are also very much, you know, investing and purchasing.  That is incredibly important."

It turns out, based on the recent report, that much of what Jean-Pierre said concerning the economy is simply not true.  As the report indicates, business investment is down.  As is consumers' real disposable income.

Yes, consumer spending increased.  But so did Americans' credit card debt, which now stands at a whopping $860 billion.

And, although the official unemployment stands at 3.6 percent, the labor participation rate remains low at 62.2 percent.  Meanwhile, there are more than 11.4 million unfilled jobs, and wages are not keeping up with inflation, meaning that average Americans are getting poorer due to Biden's inflationary policies.

What's more, the U.S. index of consumer sentiment clocked in at a miserable 51.1 last month, down from 81.2 just one year ago.  For more context, it was 101 before the pandemic.

Unfortunately, these trends are likely to become worse as the Federal Reserve continues to raise interest rates, which will deter business investment, reduce home purchases, increase Americans' outstanding debt, and generally slow down the economy.

Just in case that is not enough bad news, we also learned today that the Democrats have come to an agreement on a bill laughably called the Inflation Reduction Act, which includes $739 billion in new taxes and $443 billion in new spending programs!

Just to be clear, raising taxes and increasing spending during a recession are a surefire recipe to make the situation worse, not better.

Chris Talgo (ctalgo@heartland.org) is senior editor at The Heartland Institute.

Image: QuoteInspector.com.