Janet Yellen, Treasury secretary, speaks at a news conference in Washington, D.C. on Oct. 14, 2022. Photo: Ting Shen/Bloomberg via Getty Images
Treasury Secretary Janet Yellen told CNN Thursday that she does not see any signs of recession in the U.S. economy in the near future.
Why it matters: Her comments come in the wake of a GDP report from the Commerce Department that found the U.S. economy expanded at a 2.6% annual rate in the third quarter, ending the streak of back-to-back contractions that raised fears of a recession.
Thought bubble, via Axios' Felix Salmon: Given the positive GDP growth in the third quarter, it’s almost certain that we’re not in recession. But that comes as cold comfort to millions of Americans seeing their real incomes being eroded by high inflation.
What she's saying: "Look, what we’re seeing right now is solid growth this quarter. Growth has obviously slowed following a very rapid recovery from high unemployment," Yellen said when asked about the latest GDP data in an interview aired on CNN's "Erin Burnett OutFront."
- "We're at a full employment economy. It's very natural that growth would slow. And it has over the first three quarters of this year, but it continues to be OK. We have a very strong labor market. I don’t see signs of a recession in this economy at this point," she continued.
- "We have unemployment at a 50-year low … We saw in this morning’s report — consumer spending and investment spending continued to grow. We have solid household finances, business finances, banks that are well capitalized," she added. "This is not an economy that’s in recession and we continue to do well."
Yes, but: Yellen did acknowledge that inflation is "unacceptably high."
- "Americans feel that every day," she said, noting that it will likely take a few years to see prices fall back to levels "that people are more accustomed to."
The big picture: Polling has shown that inflation will play a key role in the midterm elections. Republican candidates have repeatedly slammed Democrats' record with the economy.
- Yellen previously faced criticism after admitting that her assessment last year — that inflation posed a short-term threat during the pandemic — was "wrong."