U.S. Treasury Secretary Janet Yellen listens to a presentation during a tour of the IRS Processing Facility on September 6, 2024 in Austin, Texas.
Brandon Bell | Getty Images
Minister of Finance Janet Yellen sought to reassure the public on Saturday that the U.S. economy remains strong, despite a series of weak jobs reports that have worried investors and weighed on the stock market.
“We see less frenzy in terms of hiring and employment, but we don’t see meaningful layoffs,” Yellen said at the Texas Tribune Festival in Austin. “I’m looking at the downside risks on the jobs side right now, but I think we’re seeing, and hopefully we’ll continue to see, a good, solid economy.”
Yellen said job growth had slowed from the “hiring frenzy” as the US reopened from the Covid-19 pandemic, but the economy was “recovering deeply” and “essentially operating at full employment”.
The finance minister’s comments came a day after Bureau of Labor Statistics reported another month of weaker-than-expected jobs data.
Non-farm payrollsA measure of U.S. job creation, increased by 142,000 in August, below the Dow Jones forecast of 161,000. The decline has raised concerns about a slowing labor market, with the S&P 500 falling on Friday to end worst week since March 2023.
However, the unemployment rate fell to 4.2% and job growth was higher in August than in July. Stock market sold off sharply early last monthafter weak July report raised fresh fears of a US recession
On Saturday, Yellen tried to ease concerns about the economic situation: “I don’t see any red lights flashing.”
The jobs data raised concerns about whether the Federal Reserve can achieve a so-called “soft landing,” raising interest rates to control inflation and then cutting them before the economy falls into recession. The Fed is widely expected to cut rates this month.
Yellen said the US is on that path: “It’s really great to be able to get inflation down to such a meaningful level. This is what most people call a soft landing,” she said.
