U.S. in economic ‘transition,’ not bound for recession, says Treasury Secretary Janet Yellen

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Recent strong job numbers should ease Americans’ fears of a looming recession, Treasury Secretary Janet Yellen said Sunday.

The nation’s economy is slowing, not heading for crisis, Yellen said on NBC’s “Meet the Press.”

“The labor market is now extremely strong,” Yellen said, pointing to the average of 375,000 jobs gained each month over the past three months.

“This is not an economy that’s in recession. But we’re in a period of transition in which growth is slowing,” she said. “That’s necessary and appropriate, and we need to be growing at a steady and sustainable pace.”

However, the latest weekly unemployment report did show an increase in claims for the third straight week. There were 251,000 state jobless claims during the week ending July 16, according to the Labor Department, the highest level since November.

Yellen disputed the suggestion that the jobless claims numbers were signs of a possible recession.

“I don’t think that that’s a recession,” she said. “A recession is broad-based weakness in the economy. We’re not seeing that now. And I absolutely don’t think that’s necessary.”

The Treasury secretary voiced confidence that the Federal Reserve can get inflation under control, an outlook not unexpected for a member of President Biden’s cabinet.

Inflation increased more than 9% last month, compared with June 2021, reaching the highest rate in decades.

“Inflation is way too high. And, you know, the Fed is charged with putting in place policies that will bring inflation down,” she said. “And I expect them to be successful.”

Still, Yellen acknowledged major economic challenges around the globe.

“Inflation is high, not just in the United States, but also in many of our neighbors … We have a war in Ukraine that threatens potentially even higher oil prices than we’re seeing right now,” she said.

“I’m not saying that we will definitely avoid a recession, but I think there is a path that keeps the labor market strong and brings inflation down,” she said.