Treasury Secretary Yellen Said the US economy Was Transitioning to ‘Steady, Sustainable’ Growth

President Biden and Treasury Secretary Janet L. Yellen on Thursday dismissed questions on whether or not the US economy was already in a recession, pointing to the robust labor market and different metrics as indicators of its well being.

Ms. Yellen, talking at a information convention at the Treasury Department, mentioned that she didn’t consider the US was in a recession, arguing that the labor market and family stability sheets stay robust regardless of slowing progress.

Mr. Biden, talking at the White House, mentioned that whereas the economy was slowing, “we see indicators of financial progress as effectively.” The president pointed to feedback on Wednesday by Jerome H. Powell, the Federal Reserve chair, who mentioned he didn’t suppose the US was at the moment in a recession.

“And the motive is there are simply too many areas of the economy which are performing too effectively,” Mr. Powell mentioned.

The feedback got here as disappointing financial information raised fears that the economy may quickly enter a downturn, if it’s not there already. The Fed made one other massive rate of interest improve on Wednesday because it tries to tame inflation, which is probably going to cool the economy additional.

Commerce Department information launched on Thursday confirmed that gross home product, adjusted for inflation, fell 0.2 % in the second quarter, the equal of a 0.9 % annual fee of decline.

The 0.2 % decline adopted a contraction of 0.4 % in the first three months of the 12 months — which means that by one frequent however unofficial definition, the US economy has entered a recession a mere two years after it emerged from the final one.

“In the context of as we speak’s report, it is necessary to look past the headline quantity to perceive what’s occurring,” Ms. Yellen mentioned. “Overall, with a slowdown in personal demand, this report signifies an economy that’s transitioning to extra regular, sustainable progress.”

Ms. Yellen mentioned that recessions have been often marked by substantial job losses and household budgets which are beneath vital pressure. She argued that enterprise and client spending and industrial output stay robust.

The Treasury secretary added that the international economy was going through quite a few dangers that would have an effect on the United States’ financial outlook, pointing to Russia’s conflict in Ukraine, lockdowns in China and provide chain disruptions.

Ms. Yellen acknowledged that inflation stays too excessive and that taming it was the Biden administration’s high precedence.

“We merely have not seen something like this since the Seventies, and seeing what’s occurring to meals costs and power costs and hire and different costs in the economy is making households very involved about their family budgets,” Ms. Yellen mentioned.

She additionally expressed assist for the proposed local weather and tax laws that Senate Democrats unveiled on Wednesday night, suggesting that it might assist ease inflation. The invoice goals to scale back prescription drug prices and supply expanded tax credit for electrical autos whereas elevating taxes on massive firms and ramping up enforcement of the tax code.

“These efforts are lengthy overdue, and Congress ought to go it instantly,” Ms. Yellen mentioned.

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