Janet Yellen: 'You don't have a recession' with unemployment at 50-year low
US economy may avoid a recession this year, Janet Yellen says
After a strong January, what's next in the fight on inflation?
Host Gerry Baker breaks down January's economic barometers and discusses it with guests American Spectator contributing editor Deroy Murdock and founder of the Bahnsen Group, David Bahnsen on 'WSJ at Large.'
Treasury Secretary Janet Yellen on Monday said she sees a path in which the U.S. economy avoids a recession, citing a slow-but-steady decline in inflation, strong job growth and a historically low unemployment rate.
"You don't have a recession when you have 500,000 jobs and the lowest unemployment rate in more than 50 years," Yellen said during an interview on ABC's "Good Morning America." "What I see is a path in which inflation is declining significantly, and the economy is remaining strong."
Her comments came just a few days after the Labor Department reported that the U.S. economy unexpectedly added 517,000 jobs in January – well above the 185,000 forecast by economists – and the unemployment rate dropped to 3.4%, the lowest since 1969. It marked the best month for job creation since July.
US JOB GROWTH UNEXPECTEDLY SURGES IN JANUARY AS ECONOMY ADDS 517,000 NEW POSITIONS
Treasury Secretary Janet Yellen speaks during a news conference at the 2022 annual meeting of the International Monetary Fund and the World Bank Group, Oct. 14, 2022, in Washington. (AP Photo/Manuel Balce Ceneta, File / AP Newsroom)
The surprisingly strong hiring data, which occurred despite a slew of layoffs in the tech sector, dashed investor hopes that the Federal Reserve will soon pause its aggressive rate-hike campaign as it tries to cool inflation and the labor market.
While Yellen said that tackling inflation remains President Biden's No. 1 domestic priority, she argued that the recent data proved the economy is still healthy. Inflation hit a high of 9.1% in June and has been falling for the past six months. Still, at 6.5%, it remains about three times higher than the pre-pandemic average and continues to inflict financial pain on millions of U.S. households.
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"What I see is a path in which inflation is declining significantly, and the economy is remaining strong," she said. "And really that’s a path I believe is possible, and it’s what I’m hoping we will be able to achieve."
The dome of the U.S. Capitol in Washington on Oct. 4, 2021. (AP Photo/J. Scott Applewhite / AP Newsroom)
Yellen also called on Congress to raise the federal debt limit, warning that a failure to do so could trigger an "economic and financial catastrophe."
"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," she said.
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The Treasury Department began deploying so-called "extraordinary measures" last month to ensure the U.S. government can continue to pay its bills, giving Congress until at least early June to raise the country's current $31.4 trillion borrowing limit.
Congress last voted in December 2021 to lift the debt ceiling, which is the legal limit on the total amount of debt that the federal government can borrow on behalf of the public, including Social Security and Medicare benefits, military salaries and tax refunds.