A strange kind of recession

It’s possible that I owe Joe Biden some sort of an apology, however mealy-mouthed it might be. Last week I mentioned here the weird prevarication from the US government and its supporters over whether or not the US is technically in a recession. It arose from the news that the US had two successive quarters of negative GDP growth. Biden’s critics – myself included – leapt to declare the US in recession. According to the Bank of England, the UK is heading for a recession too, so there should be no especial shame in accepting the fact and then trying to deal with it.

But then last Friday the US jobs figures landed and it became clear that the situation in the country is curiouser than we might have predicted. Everybody was expecting a contraction in the economy. Yet when the jobs figures came out they showed the opposite. Payroll employment in the US rose by 528,000 in July – more than double what was predicted, edging the national unemployment rate down to 3.5