In an interview on CBS News' Face the Nation, Treasury Secretary Janet Yellen acknowledged that a U.S. recession is still a possibility, despite the current strength of the economy. Yellen pointed to the June jobs report, which showed a slower pace of job growth compared to previous months, as evidence of a potential slowdown. However, she emphasized that this is a normal occurrence after a period of rapid growth.
Yellen praised the strength of the job market and the decrease in the unemployment rate, but cautioned that monthly job gains will likely slow down to a more normal level. She also acknowledged that inflation remains too high, although it has started to ease. Inflation stood at 4% year-over-year in May, which is the lowest it has been in over two years but still above the Federal Reserve's target of 2%.
The most recent data released by the Labor Department showed that the unemployment rate in June was 3.6%. While this is a positive sign, the number of jobs added fell short of estimates and was the lowest since December 2020.
The Federal Reserve has been attempting to address inflation by raising interest rates, which has slowed economic growth and raised concerns about a potential recession. Economists and policymakers are hoping for a more sustainable level of job growth that will allow inflation to fall without drastic rate increases or a recession.
Yellen's comments come after lawmakers agreed to raise the debt ceiling at the end of June, reducing the risk of the country defaulting on its loans. This led Yellen to downgrade the risk of a recession, stating that her odds of a recession have actually decreased.
Overall, Yellen's remarks reflect a cautious outlook on the economy. While she acknowledges the current strength of the job market, she also recognizes the potential for a slowdown and the need to address inflation. As a centrist journalist, it is important to present this information in an unbiased and unemotional manner, allowing readers to form their own opinions on the state of the economy.