Treasury Secretary Janet Yellen sought to reassure the general public on Saturday that the U.S. economy remained strong despite a series of weak jobs reports which have unsettled investors and weighed on the stock market.
“We are seeing less excitement in terms of hiring and job openings, but we are not seeing significant layoffs,” Yellen said on the The Texas Tribune Festival in Austin. “I'm currently paying attention to the downside risk on the employment side, but I think we're seeing a good, solid economy and hope we continue to see that.”
Yellen said job growth has slowed in comparison with the “hiring spree” when the U.S. reopened after the Covid-19 pandemic, however the economy is “in the midst of recovery” and “basically operating at full employment.”
The finance minister’s comments come in the future after the Office of Labor Statistics reported one other month of cooler-than-expected employment data.
Nonfarm payrolls, a measure of U.S. job creation, rose 142,000 in August, below the Dow Jones forecast of 161,000. The decline renewed concerns a few slowing labor market. The S&P 500 fell on Friday, ending the week with its worst reading since March 2023.
However, the unemployment rate fell barely to 4.2% and employment growth in August was higher than in July. Stock markets saw a pointy sell-off early last month after the weak July report sparked renewed recession fears within the US.
Yellen tried to calm nervousness concerning the economic situation on Saturday: “I don't see any flashing red lights.”
The jobs data has raised concerns about whether the Federal Reserve can achieve a so-called “soft landing,” raising rates of interest to bring inflation under control after which cutting rates before the economy falls into recession. The Fed is widely expected to chop rates later this month.
Yellen said the U.S. is on that path: “It's really amazing that we've been able to bring inflation down so significantly. Most people would call that a soft landing,” she said.
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