Yellen feels more confident of U.S. soft landing after inflation, jobs data
Treasury Secretary Janet Yellen is more confident of the U.S. economy achieving a soft landing, Bloomberg reported, after recent data showed a steady cooling of inflation and an increase in jobseekers.
“Every measure of inflation is on the road down,” Yellen said in an interview en route back from attending the G20 summit in New Delhi.
When asked about her prior expectation of the U.S. avoiding a recession while reining in retail inflation, Yellen said, “I am feeling very good about that prediction. I think we’re on a path that looks exactly like that.”
Note that while the headline monthly inflation rate has been at ~2.5% in the past couple of months, other measures that strip out volatile food and energy prices show a higher level.
Yellen highlighted that the labor market has been softening in response to the Federal Reserve’s aggressive tightening. “Layoffs have not moved up really meaningfully at all – this is a healthy way for the labor market to adjust.”
As recent economic data has been increasingly encouraging, economists are either abandoning or postponing their calls for a recession in the U.S.
Goldman Sachs now sees a 15% chance of the U.S. slipping into recession, well below its 35% projection issued in March during the height of the banking crisis.
