U.S. Treasury Secretary Janet Yellen listens to a presentation during a tour of the IRS Processing Facility on September 06, 2024 in Austin, Texas.
Brandon Bell | Getty Images
Treasury Secretary 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 rattled investors and weighed on the stock market.
“We’re seeing less frenzy in terms of hiring and job openings, but we’re not seeing meaningful cuts,” Yellen said at the Texas Tribune Festival in Austin. “I’m focused on the downside risk on the employment side now, but what we’ve seen and I hope we’ll continue to see is a good, solid economy.”
Yellen said job growth had slowed compared to the “hiring frenzy” when the US reopened after the Covid-19 pandemic, but the economy was “in a deep recovery” and “essentially at full employment”.
The Treasury secretary’s comments come a day after the Bureau of Labor Statistics reported another month of cooler-than-expected jobs data.
Nonfarm payrolls, a measure of U.S. job creation, rose 142,000 in August, below the Dow Jones estimate of 161,000. The miss renewed concerns about a slowing labor market, with the S&P 500 falling on Friday to end its worst week since March 2023.
However, the unemployment rate fell to 4.2% and job growth in August was higher than in July. The stock market sold off sharply early last month after a weak July report touched off renewed fears of a U.S. recession.
On Saturday, Yellen tried to calm worries about the state of the economy: “I don’t see any red lights flashing.”
The jobs data raised concerns that the Federal Reserve could do a so-called “soft landing,” raising interest rates to keep inflation under control and then cut rates before the economy slips into recession. The Fed is expected to cut interest rates this month.
Yellen said the U.S. was on track: “It’s been really amazing to get inflation down as meaningfully as we have. Most people would call it a soft landing,” she said.
