Biden optimistic despite economy shrinking

President Joe Biden tried to soothe Americans' worries about the strength of the economy on Thursday, after new data showed it had contracted for two quarters in a row.

Biden and top White House officials touted several positive facts about the U.S. economy, including that employers are still hiring, unemployment is at 50-year lows and manufacturers are still investing.

"That doesn't sound like a recession to me," Biden told reporters.

Anxieties about the economy could tank Biden's fellow Democrats during the Nov. 8 midterm elections for control of Congress.

The president's approval rating has fallen to a record low of 36%, according to Reuters/Ipsos polling, with the economy listed at the top of voters' concerns as higher grocery, gas and housing bills mount. 

While the second straight quarterly decline in GDP meets a standard shorthand definition of a recession, the White House, the Federal Reserve and many economists believe the broader conditions are not close to being met, given strong consumer spending and job markets.

Biden aides attribute the lower growth to the Federal Reserve hiking interest rates four times this year to curb decades-high inflation, and what they hope is a short-term trend of businesses slowing down on restocking their inventories, after over-compensating for shortfalls earlier during the COVID-19 pandemic.

"It's no surprise that the economy is slowing down as the Federal Reserve acts to bring down inflation," Biden said in an earlier statement. "We are on the right path and we will come through this transition stronger and more secure."

New Commerce Department data estimated that gross domestic product fell at a 0.9% annualized rate last quarter, after economists saw the figure ticking up by 0.5%