OUR Joe Biden admitted the risk of “very light” recessionbut even such a development would be painful for American households and politically dangerous for the American president himself.

Economic shocks, even of moderate intensity, traditionally lead to a significant increase in unemploymentas companies cut their workforce by the millions in response to declining demand.

This would undermine Biden, who has been touting job growth and job creation by arguing that the economy is on solid footing despite the highest inflation in 40 years.

The US recession is a “breakthrough,” said Bruce Kasman, chief economist at JPMorgan Chase. “That’s a rise in the unemployment rate of 2% or more.” In an interview on Tuesday with the CNN news network, Joe Biden said the American people do not need to prepare for a recession, citing the resilience of the national economy. “I don’t think there will be a recession. If there is, it will be very small. That is, we will move down a little,” he said.

The President of the United States often dismisses suggestions of a recession caused by the Federal Reserve (Fed) raising interest rates to curb high inflation.

Upbeat talk about the economy is a staple of any US administration as presidents try to boost consumer and business confidence while avoiding the political fallout of an economic downturn. The US is in an “economic transition,” Joe Biden said in a mid-week Twitter comment after being briefed by Brian Deese, director of his National Economic Council. Recession forecasts are mounting as the Federal Reserve feels compelled to raise interest rates even higher to control inflation, which is proving to be higher and more resilient than expected.

Anna Wong, chief U.S. economist at Bloomberg Economics, expects the country to slide into recession in the second half of 2023, which, if it does, will raise the unemployment rate to 4.9% from 3.5% currently. “There is a significant risk that a more severe than expected global recession or financial turmoil could push the US into recession in the first half of 2023,” he said. Biden’s comments on the state of the world’s largest economy came against a backdrop of bleak economic prospects elsewhere. The IMF, on the sidelines of its annual meetings, said in a report that “the worst is yet to come” for the global economy and revised its growth forecasts, citing the impact of the war in Ukraine, China’s slowdown, and the impact of higher interest rates internationally.

Biden’s prediction that any recession would be “very mild” if it occurred prompted his top economic advisers to say inflation would be “temporary.” During the dozen post-World War II recessions, the economy shrank by an average of 2.5 percent, while unemployment rose by about 3.8 percentage points and corporate profits fell by about 15 percent.

The average duration of the contraction of the US economy was 10 months. Finally, it should be noted that a one percentage point increase in the unemployment rate means about 1.6 million jobs lost, Ms. Wong stressed.