Treasury Secretary Janet Yellen sought to reassure the public on Saturday that the U.S. economy remains strong, despite a string of weak job 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 layoffs,” Yellen said at the Texas Tribune Festival in Austin. “I’m attentive to downside risk now on the employment side, but what I think we’re seeing, and hope we will continue to see, is a good, solid economy.”
Yellen said job growth has slowed compared to the “hiring frenzy” when the U.S. reopened after the Covid-19 pandemic, but the economy is “deep into a recovery” and “basically operating 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, increased by 142,000 in August, lower than the Dow Jones forecast of 161,000. The miss renewed worries about a slowing labor market, with the S&P 500 falling Friday to finish out the worst week since March 2023.
The unemployment rate, however, edged lower to 4.2% and job growth in August was higher than July. The stock market sold off steeply early last month, after the weak July report touched off renewed fears of a recession in the U.S.
Yellen on Saturday tried to calm jitters about the state of the economy: “I don’t see red lights flashing.”
The jobs data has raised worries about whether the Federal Reserve can clinch a so-called “soft landing,” raising interest rates to bring inflation under control and then executing cuts before the economy enters a recession. The Fed is widely expected to lower interest rates this month.
Yellen said the U.S. is on that path: “It really has been amazing to be able to get inflation down as meaningfully as we have. This is what most people would call the soft landing,” she said.
