U.S. Treasury Secretary Janet Yellen speaks and listens to a presentation during a tour of an Internal Revenue Service processing facility on September 6, 2024 in Austin, Texas.
Brandon Bell | Getty Images
U.S. Treasury Secretary Janet Yellen sought to reassure the public on Saturday that the U.S. economy remains strong, despite a string of weak jobs reports that have rattled investors and weighed on the stock market.
“We’re seeing less of the euphoria around hiring and job creation, but we’re not seeing significant layoffs,” Yellen said at the Texas Tribune Festival in Austin. “I’m mindful of the downside risks now on the employment side, but what I think we’re seeing, and I hope we continue to see, is a good, solid economy.”
Yellen said job growth has slowed compared to the “hiring frenzy” when the United States reopened its economy after the Covid-19 pandemic, but the economy is “in a deep recovery” and “operating essentially at full employment.”
The Treasury secretary's comments come a day after the Bureau of Labor Statistics reported another month of colder-than-expected jobs data.
Nonfarm payrolls, a measure of U.S. job creation, rose by 142,000 jobs in August, missing Dow Jones forecasts of 161,000. The decline renewed concerns about a slowing labor market, with the S&P 500 index falling on Friday to close out 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 suffered a sharp sell-off early last month after a weak July report raised renewed fears of a U.S. recession.
Yellen on Saturday tried to calm tensions over the state of the economy: “I don’t see red lights flashing.”
The jobs data has raised concerns about whether the Federal Reserve can achieve a so-called “soft landing,” by raising interest rates to control inflation and then cutting them before the economy enters a recession. The Fed is widely expected to cut rates this month.
Yellen said the United States was on that path: “It’s been really amazing that we’ve been able to bring inflation down as substantially as we have. That’s what most people call a soft landing.”
