U.S. Treasury Secretary Janet Yellen sought to reassure the public on Saturday about the strength of the U.S. economy despite a series of weaker-than-expected employment reports that have rattled investors.
Speech at Texas Tribune Festival
Speaking at the Texas Tribune Festival in Austin, Yellen said job growth had slowed due to the “hiring frenzy” that followed the reopening of the economy following the COVID-19 pandemic, but that the U.S. was on track for a “soft landing.” She emphasized that the economy was still robust and there had been no significant increase in layoffs.
August Employment Report
Her comments came just a day after the Bureau of Labor Statistics released its full-month employment data, showing that nonfarm payrolls rose by 142,000 in August, below the Dow Jones Industrial Average’s forecast of 161,000. The report added to concerns about a slowing labor market and contributed to the S&P 500’s worst week since March 2023.
Future Outlook
Despite the slowdown in job growth, the unemployment rate fell to 4.2% and August's job gains exceeded July's. However, fears of a potential recession have rekindled after a sharp sell-off in the stock market, particularly following the weak July jobs report. Yellen has tried to allay those concerns by saying, 'I don’t see any red lights flashing.' She expressed confidence in the Fed’s ability to manage the economy, highlighting the progress being made in reducing inflation without triggering a recession. The Fed is expected to cut interest rates this month, and Yellen believes the move will contribute to the expected soft landing.
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