U.S. Treasury Secretary Janet Yellen addressed concerns about the state of the economy during the Texas Tribune Festival in Austin, following a series of weak job reports that have worried investors and impacted the stock market. Yellen stressed that the U.S. economy remains strong, emphasizing a slowdown in the hiring frenzy but highlighting the absence of significant layoffs. She noted, “I’m attentive to downside risk now on the employment side, but what I think we’re seeing, and hope we will continue to see, is a good, solid economy.”
Yellen’s remarks follow the Bureau of Labor Statistics’ report showing nonfarm payrolls grew by 142,000 in August, falling short of the Dow Jones forecast of 161,000. While the unemployment rate slightly declined to 4.2% and job growth in August surpassed July’s figures, the underwhelming jobs data stirred concerns about a slowing labor market, causing the S&P 500 to suffer its worst week since March 2023.
Despite the weaker-than-expected job creation, Yellen remained optimistic, noting that the economy is “deep into a recovery” and “basically operating at full employment.” She aimed to reassure the public by stating, “I don’t see red lights flashing.”
The job reports have raised questions about the Federal Reserve’s ability to achieve a “soft landing” by balancing interest rate hikes to curb inflation without triggering a recession. Yellen expressed confidence in this strategy, remarking, “It really has been amazing to be able to get inflation down as meaningfully as we have. This is what most people would call the soft landing.”
Market analysts are widely expecting a reduction in interest rates this month, aligning with Yellen’s optimistic outlook. Yellen’s comments sought to ease fears and instill confidence in the robust foundation of the U.S. economy despite recent fluctuations in job growth and market performance.
Original Story https://www.cnbc.com/2024/09/07/yellen-says-us-economy-remains-solid-heading-toward-soft-landing.html
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