US Treasury Secretary Janet Yellen provided reassurance to the public on Saturday regarding the strength of the U.S. economy, amidst concerns stemming from a series of lackluster job reports that have unsettled investors and impacted the stock market.
Speaking at the Texas Tribune Festival in Austin, Yellen acknowledged a slowdown in job growth compared to the initial surge following the reopening post-Covid-19. However, she emphasized that the economy is deeply entrenched in a recovery phase and is currently operating at near full employment.
Yellen’s statements come shortly after the release of the Bureau of Labor Statistics’ August job data, which fell below expectations with nonfarm payrolls increasing by 142,000, lower than the Dow Jones forecast of 161,000.
This underwhelming data rekindled worries about a decelerating labor market, leading to a significant drop in the S&P 500, resulting in the worst weekly performance since March 2023. Despite this, the unemployment rate slightly decreased to 4.2% in August, and job growth showed improvement compared to July.
Meanwhile, Yellen also highlighted the efforts towards achieving a “soft landing,” a transition period where interest rates are adjusted to manage inflation before any downturn, a move that is anticipated to be executed by the Fed in the upcoming months.
