top line
A recession is “not entirely off the table” even if the US economy remains strong, Treasury Secretary Janet Yellen said in an interview on CBS on Sunday, after the June jobs report released earlier this week showed the US economy was weakening jobs than in the previous months – a trend that Yellen described as “normal” after years of rapid growth.
During an interview on CBS, a recession is still a possibility.`/Mark Schiefelbein
Important facts
In an interview with CBS News’ Face the Nation, Yellen described the job market as strong, but said “we expect… a slower pace of ongoing job growth” after adding just over 200,000 jobs in June — a slowdown compared to the previous months.
While Yellen praised that more workers had returned to the labor market and the unemployment rate had fallen precipitously, she warned monthly job gains were slowing to a “more normal level” and said it was “reasonable and normal,” a more moderate one achieve economic growth.
The finance minister said inflation remained “too high” but noted it had started to ease after prices rose 4% year on year in May – the lowest inflation figure in more than two years but still twice as high high as the Federal Reserve’s 2% target.
Big number
3.6%. That was the unemployment rate for June, according to data released on Friday.
Crucial quote
“Inflation [is] too high, a concern of ours and the American people, but decreasing over time, and I hope and believe there is a way to lower inflation in the context of a healthcare labor market and the data I compiled “The what I what I’ve seen suggests we’re on that path,” Yellen said on CBS.
Important background
The US economy added 209,000 jobs last month, data released by the Labor Department on Friday showed. The unemployment rate fell slightly to 3.6% in June from 3.7% in May. While the numbers were encouraging, they fell short of estimates, recording the lowest number of new jobs in a month since December 2020. In May, the US economy added 339,000 jobs. For months, the Federal Reserve has been attempting to stem inflation by raising interest rates to their highest levels in decades, slowing economic growth and fueling fears of a recession. As a result, many economists and policymakers are hoping that job growth will moderate to more sustainable levels and inflation can come down without forcing the Fed to hike rates sharply or plunging the country into recession. The central bank opted not to raise interest rates any further last month, but hinted that further rate hikes were likely this year, saying on Wednesday a recession in 2023 was “fairly likely” but unlikely to be “deep.” or will be “persistent”.
tangent
In late June — after lawmakers agreed to raise the debt ceiling and avert the risk of the country defaulting on its loans — Yellen downgraded the risk of a recession, saying “my chances of that, if any, are down.” Interviewed Bloomberg.
further reading
US added fewer-than-expected 209k jobs last month as job market cools – slightly (Forbes)
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I’m a reporter based in Washington DC. Before joining Forbes, I was a fact checker at USA Today. My previous work includes E&E News, the Baltimore Sun, NBC News and Maryland Matters. I am a graduate of Saint Joseph’s University with a degree in Political Science. Email me at [email protected] and follow me on Twitter @AnaFaguy.
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