Yellen says U.S. economy remains solid, heading toward ‘soft landing’

Treasury Secretary Janet Yellen tried to reassure Americans on Saturday that the U.S. economy remains strong despite a series of weak jobs reports that have spooked investors and weighed on the stock market.

“While the hiring and hiring frenzy has subsided, we are not seeing meaningful layoffs,” Yellen said. Texas Tribune Festival “Right now I’m watching the downside risks on the employment side, but what we’re seeing, and what I expect we’ll continue to see, is a good, robust economy,” he said in Austin.

Yellen said that while job growth has slowed compared to the “hiring rush” that occurred as the U.S. reopened after the coronavirus pandemic, the economy is “in the midst of a recovery” and “operating at essentially full employment.”

The Secretary of the Treasury’s comments: Bureau of Labor Statistics It reported another month of weaker-than-expected employment data.

Nonfarm payrolls, a measure of U.S. job creation, rose by 142,000 in August, below Dow Jones’s forecast of 161,000. The miss rekindled concerns about a slowing labor market, helping send the S&P 500 lower on Friday, finishing with its worst week since March 2023.

But the unemployment rate fell to 4.2 percent and payrolls rose in August from July. Stock markets plummeted early last month after the weak July report renewed fears of a U.S. recession.

Yellen on Saturday sought to ease fears about the state of the economy, saying she “doesn’t see any red flags.”

The jobs report has raised concerns about whether the Federal Reserve can achieve a so-called “soft landing” — raising interest rates to tame inflation and then cutting them before the economy slides into recession. The Fed is widely expected to cut interest rates this month.

Yellen said the U.S. was on that path, saying, “It’s really remarkable that we’ve been able to bring inflation down so significantly. Most people would call this a soft landing.”