Daily Management Review

'You Don't Have A Recession,' Since Unemployment In The US Is At A 53-Year Low: Yellen


'You Don't Have A Recession,' Since Unemployment In The US Is At A 53-Year Low: Yellen
Given the strength of the US labor market, US Treasury Secretary Janet Yellen said on Monday that she sees a path to avoid a US recession, with inflation falling significantly and the economy remaining strong.
"You don't have a recession when you have 500,000 jobs and the lowest unemployment rate in more than 50 years," Yellen told ABC's Good Morning America program.
"What I see is a path in which inflation is declining significantly and the economy is remaining strong."
Yellen stated that inflation remained too high, but that it had been falling for the past six months and could fall significantly given the Biden administration's measures, such as steps to reduce the cost of gasoline and prescription drugs.
According to US Labor Department data released on Friday, job growth accelerated sharply in January, with nonfarm payrolls increasing by 517,000 and the unemployment rate falling to a 53-1/2-year low of 3.4%.
The hiring surge, which occurred despite layoffs in the technology sector, reduced market expectations that the Federal Reserve of the United States was on the verge of pausing its monetary policy tightening cycle.
Yellen told ABC that while lowering inflation is still Biden's top priority, the US economy is proving "strong and resilient."
Three separate pieces of legislation – the Inflation Reduction Act, the CHIPS Act, and a massive infrastructure law – would all help drive down inflation, she said, as would a price cap imposed on Russia oil.
Yellen urged Congress to raise the US debt ceiling, warning that failure to do so would result in "an economic and financial disaster."
"While sometimes we've gone up to the wire, it's something that Congress has always recognized as their responsibility and needs to do again."
Last month, the US government reached its $31.4 trillion debt ceiling, prompting the Treasury Department to warn that it may not be able to avoid default past early June.
Republican House Speaker Kevin McCarthy and President Joe Biden met last week to discuss raising the debt ceiling and agreed to meet again, but the standoff has unsettled markets.