2024-01-05 23:54:01
U.S. Treasury Secretary Yellen pointed out on Friday (5th) that the U.S. economy has achieved a soft landing and that the American people need sustained low inflation and wage growth to feel good regarding their future prospects.
“What we’re seeing now, I would call it a soft landing for the economy, and I hope it continues,” Yellen said in an interview on Friday.
Yellen’s comments came shortly following the release of a jaw-droppingly strong December jobs report.
Data from the U.S. Department of Labor showed that non-farm employment increased by 216,000 people in December last year, far exceeding market expectations of 170,000. The previous value was significantly revised down to 173,000. The unemployment rate fell to 3.7%, lower than market expectations of 3.8% and unchanged from the previous value, showing that the labor market is still stronger than expected as the Federal Reserve attempts to slow economic growth.
However, the non-farm payrolls report also suggested that inflation still faces upward risks, prompting investors to reduce their bets that the Federal Reserve will start cutting interest rates in March. The futures market expects that the probability of the Federal Reserve cutting interest rates in March has dropped to around 65%.
Yellen focused on the latest wage data. Data on Friday showed that average hourly wages increased by 0.4% monthly in December and 4.1% annually, higher than market expectations of 0.3% and 3.9% respectively.
Yellen pointed out that wage growth is outpacing price growth, which means that American workers are succeeding, and the progress of middle-income families is very obvious.
Yellen declined to comment on the possible direction of the Fed’s easing policy, but said the U.S. central bank’s current policies are good.
Yellen said that the trends in the labor market, economy and inflation indicate that the Federal Reserve has made a series of correct decisions. For two years, Yellen has resisted the most pessimistic forecasts for the U.S. economy, repeatedly reiterating that she sees a path to realization, even as the Fed pursues aggressive rate hikes throughout much of 2022 and 2023. The road to a soft landing.
Yellen said on Friday that there was a lot of pessimism regarding the economy, but it turned out to be unfounded. A year ago, most forecasters thought the United States would fall into recession. Obviously, this didn’t happen.
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