Treasury Secretary Janet Yellen denies economy is in recession but admits it’s ‘slowing down’: Biden official says inflation at 9.1% is ‘too high’ but he there are no “signs” of slowing down
- Treasury Secretary Janet Yellen said the slowing economy was ‘necessary and appropriate’ for her long-term health during an interview with Meet The Press
- Biden official asked if Americans should ‘prepare’ for a recession
- It comes as the economy becomes a growing problem for Democrats ahead of November’s midterm elections.
- President Biden also called the inflation rate too high, but said the data was “outdated”.
- Yellen and Biden met with the president’s other economic advisers on Friday
Treasury Secretary Janet Yellen acknowledged on Friday that the economy was “slowing down” amid fears of an impending financial downturn – but denied the country was in deep recession.
She also defended the slowdown as “necessary” for the long-term health of the economy.
The top Biden official was asked on NBC News’ Meet The Press whether Americans should be “preparing” for a recession.
Yellen did not directly rule it out in the future, but insisted that the “signs” of a typical recession were not present in the current economy.
Americans’ pocketbooks are of growing concern to Democrats as the midterm elections loom amid multiple polls indicating voters are unhappy with the way the economy is being run.
“The economy is slowing down. Last year it grew very rapidly by about 5.5%, and that was successful in getting people who had lost their jobs during the pandemic back to work,” Yellen said on Sunday.
She also pointed to impressive gains in the labor market over the past few months – despite data from late last week even indicating this could slow as jobless claims increase.
“This is not an economy in recession, but we are in a transition period in which growth is slowing down, and that is necessary and appropriate, and we need to grow at a steady and sustainable pace,” Yellen said.
Treasury Secretary Janet Yellen said ‘signs’ of a recession were not present in the current economy
“So there is a slowdown and businesses can see that, and that’s appropriate given that people now have jobs and we have a strong labor market.
“But you don’t see any of the signs now – a recession is a broad-based contraction that affects many sectors of the economy. We just don’t have that.
Metrics such as consumer spending, industrial production and credit quality remain above recessionary levels, Yellen said.
Although she sympathizes with the burden that the price spike has placed on these consumers.
“Inflation is way too high and you know [Federal Reserve] is responsible for putting in place policies that will reduce inflation, and I expect them to succeed,” she said.
The most recent inflation data shows the average cost of consumer goods rose 9.1% in June, according to the Labor Department, the highest level seen since 1981.
President Joe Biden acknowledged the figure was unacceptable, but insisted the figure was “outdated” and did not include the steady decline in gasoline prices seen this month.
US inflation hit 9.1% in June, the highest since 1981 and above what the economist predicted
President Joe Biden virtually attends a meeting with his economics team in the South Court Auditorium of the White House complex in Washington, Friday, July 22
Pump prices have continued to decline after hitting a record average of $5 a gallon in mid-June.
On Sunday, the national average price was around $4.37 on Sunday, July 24. This is still more than a dollar above the July 2021 average price.
Biden held a meeting of his economic advisers, including Yellen, on Friday on how to lower gas prices further.
He touted measures such as releasing barrels of oil from the U.S. Strategic Petroleum Reserve while renewing calls for energy companies with unused drilling permits to use them or lose them.
Biden officials have also used exorbitant energy prices to accelerate the nation’s transition to clean energy, which they say is the most permanent cost solution.
“In the days and weeks ahead, I will continue to do what I can to bring down the price of gasoline at the pump,” the president said Friday.
“But the real answer is to get to a clean energy economy as soon as possible; turn that into something positive. That means cleaner renewable energy, more affordable electric vehicles, and clean energy made right here in the United States. This is how we will protect the climate and create jobs.
Biden attended the meeting via remote video link as he recovers from COVID-19.