United States Secretary of the Treasury Janet Yellen said this weekend the US economy is in a “necessary and appropriate” slowdown and no signs of a recession have been detected.
Appearing on NBC’s Meet the Press on Sunday, Secretary Yellen told Chuck Todd that what the Treasury is seeing on the economic landscape is not a recession, but rather a “transitional slowdown.”
“This is not an economy that is in recession,” Yellen said. She pointed out that after the COVID-19 pandemic relaxed a bit, a surge in spending spurred the resurgence of the labor market, but that the quick change was bound to be followed by a transitional slowdown. “You don’t see any of the signs [of a recession],” said Yellen. “Now, a recession is a broad-based contraction that affects many sectors of the economy. We just don’t have that.”
The US economy added 372,000 jobs in June, marking the 4th consecutive month of job gains over 350,000. Yellen did not downplay the risk of a recession, but says she believes the US can avoid one. “I’m not saying that we will definitely avoid a recession,” Yellen said. “But I think there is a path that keeps the labor market strong and brings inflation down.”
She continued, “We’ve cut the deficit by a record one and a half trillion dollars this year … We’ve seen gas prices just in recent weeks come down by about 50 cents and there should be more in the pipeline. And hopefully we will pass a bill that will lower prescription drug costs and maintain current levels of health care costs.”
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