Incredible! KJP insists that GDP report shows "we're in a transition"

True enough … but from what and to what? Karine Jean-Pierre found herself challenged on the relatively chummy environs of The View today over Joe Biden’s claim that the economy was “on the right path.” “A lot of Americans don’t feel that way,” Satah Haines noted with significant understatement, given that RCP’s aggregate average of the right/wrong direction is presently 17.6/74.6.

Jean-Pierre responds by taking up Biden’s Chip Diller strategy, claiming that we’re on a “transition” to a great economy. The “transition” part is true enough, at least:

Needless to say, Americans are feeling a transition under Biden, and it’s not to “all is well.” The White House keeps hammering on their claim of 2.7 million jobs created this year, but those are jobs that were recovered, not created. The employment base of the US has still not caught up to February 2020’s level, although the private-sector level finally did last month. Neither figure accounts for population growth of 3.8 million over that period and the need to add another 2 million more jobs to keep pace, either.

The real “transition” felt by American households has come from inflation. That has “transitioned” their real disposable income downward over the past two quarters, which is one reason why American voters believe we’re in a recession. And it’s likely to continue “transitioning” in that direction for months to come, too.

They’re not the only people reading this “transition” as something less than “incredible,” either. CNBC’s analysts don’t quite get around to declaring a recession, but at least they’re more accurate about which direction Biden and his team have taken the economy.

“Weakening at a much faster rate” is not the transition that Americans wanted in 2022. Nor is the destruction of their real disposable income, for that matter. In his analysis of the data, CNBC’s Jeff Cox edges up to the R-word, while Mark Zandi affirms what Mohamed El-Erian told Squawk Box:

Officially, the National Bureau of Economic Research declares recessions and expansions, and likely won’t make a judgment on the period in question for months if not longer.

But a second straight negative GDP reading meets a long-held basic view of recession, despite the unusual circumstances of the decline and regardless of what the NBER decides. GDP is the broadest measure of the economy and encompasses the total level of goods and services produced during the period.

“We’re not in recession, but it’s clear the economy’s growth is slowing,” said Mark Zandi, chief economist at Moody’s Analytics. “The economy is close to stall speed, moving forward but barely.”

And on the employment argument made by Biden and Jean-Pierre, we may be seeing a “transition” there too:

A separate report Thursday showed that layoffs remain elevated. Initial jobless claims totaled 256,000 for the week ended July 23, a decline of 5,000 from the upwardly revised level of the previous week but higher than the Dow Jones estimate of 249,000, according to the Labor Department.

The decline in GDP came from a broad swath of factors, including decreases in inventories, residential and nonresidential investment, and government spending at the federal, state and local levels. Gross private domestic investment tumbled 13.5% for the three-month period.

I mentioned all these in my earlier analyses, but they’re worth noting here too. The Biden administration is building its messaging on rapidly eroding sand in an attempt to deny reality. After today’s report, fewer people in the media are buying the Chip Diller act, which is yet another “transition” that Biden and Jean-Pierre will have to navigate … if they can.