Biden administration Treasury Secretary Janet Yellen – who repeatedly claimed last year that inflation was “transitory” – says that there are no signs that the United States economy is in a recession.
“Look, the economy is slowing down. Last year it grew very rapidly at about 5.5%, and that succeeded in putting people back to work who had lost their jobs during the pandemic. The labor market is now extremely strong. Even just during the last three months, job gains averaged 375,000,” Yellen told moderator Chuck Todd on NBC’s “Meet the Press.”
“This is not an economy that is in recession,” Yellen added. “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.”
Notably, the United States economy contracted by 1.6% in the first quarter of 2022 and is projected to again shrink by 1.6% in the second quarter of 2022. The labor market is also cooling down with the jobless claims now at their highest point in 8 months. Meanwhile, inflation in the United States has reached 9.1% – the highest rate since November 1981.
Yellen’s comments come after she admitted that she had been “wrong” about inflation when she repeatedly said in 2021 that it was “transitory” and just a “small risk.” Yellen explained during an interview with CNN’s Wolf Blitzer that she was incorrect because of shocks in the economy that she didn’t “fully understand.”
“Well, look, I think I was wrong then about the path that inflation would take,” Yellen said. “As I mentioned, there have been unanticipated and large shocks to the economy that have boosted energy and food prices and supply bottlenecks that have affected our economy badly that I didn’t — at the time didn’t fully understand. But we recognize that now.”
