Yellen, US Treasury: “US economy on the way to a ‘soft landing’… may return to China” (Comprehensive) :: Sympathetic Media Newsis ::

“I haven’t seen any red lights flashing in the US economy”

The statement came just a day after a weaker-than-expected jobs report

Hints at talks with China… “Both countries must cooperate”

[베이징=AP/뉴시스] U.S. Treasury Secretary Janet Yellen said the U.S. economy is strong and that the slowdown in job growth in recent months is a sign of a soft landing, not a recession. The photo shows Secretary Yellen holding a press conference in Beijing, China, on April 8 (local time). 2024.04.08.

[서울=뉴시스]Reporter Park Gwang-on = U.S. Treasury Secretary Janet Yellen stated that the U.S. economy is sound and that the slowdown in job growth over the past few months is a sign of a soft landing, not a recession.

According to CNBC on the 7th (local time), Secretary Yellen said at the ‘Texas Tribune Festival’ held in Austin, Texas that day, “In terms of employment and job creation, enthusiasm is waning, but we do not see meaningful layoffs.”

He continued, “I’m cautious about the downside risks on the employment side right now, but I think we’re seeing a good, solid economy and I hope we’ll continue to see that going forward.”

While job growth has slowed compared to the “hiring frenzy” that occurred when the U.S. reopened following the COVID-19 pandemic, “the economy is deep into recovery and essentially operating at full employment,” he said.

Secretary Yellen also said, “I don’t see any red lights flashing (in the U.S. economy),” and added, “It’s really remarkable that we’ve been able to bring inflation down as meaningfully as we have (without meaningful layoffs). This is what most people call a soft landing.”

CNBC reported that “Secretary Yellen was trying to reassure the public that the U.S. economy remains strong despite a series of weak jobs reports that have unsettled investors and weighed on the stock market.”

[뉴욕=AP/뉴시스] U.S. Treasury Secretary Janet Yellen said she believes the U.S. economy is healthy and that the slowdown in job growth in recent months is a sign of a soft landing, not a recession. The photo shows people walking past the New York Stock Exchange on March 22 last year (local time). 2024.09.08.

In fact, Secretary Yellen’s comments came a day after the U.S. Labor Department reported weaker-than-expected job gains.

Earlier on the 6th, the U.S. Department of Labor announced that non-farm jobs increased by 142,000 in August compared to the previous month (July). This figure is lower than the market expectation of 160,000.

In addition, the job growth rate in June and July was revised downward from the initially announced figure.

The Labor Department, which had previously reported a 179,000 job increase in June, has now lowered its estimate to 118,000, a 61,000 cut from its original estimate.

The net increase in July was also revised downward by 25,000, reducing the original reported increase of 114,000 jobs to 89,000.

However, the unemployment rate for August, announced along with the increase in employment, was 4.2%, down 0.1%p from the previous month. This figure was in line with expert expectations.

The unemployment rate recorded 4.0% in May, breaking out of the 3% range for the first time in 29 months, and has remained in the 4% range since then. In particular, 4.3% in July was the highest since October 2021, during the COVID-19 pandemic.

CNBC analyzed that the sluggish job growth rate has raised concerns about a slowing labor market and economic recession, and that Secretary Yellen is trying to calm them.

[광둥성=AP/뉴시스] U.S. Treasury Secretary Janet Yellen said the U.S. economy is strong and that the slowdown in job growth in recent months is a sign of a soft landing, not a recession. The photo shows Secretary Yellen (left) shaking hands with Chinese Vice Premier He Lifeng at the Guangdong Provincial Alex Reed House before their meeting during her visit to China on April 6. 2024.04.06.

The U.S. Federal Reserve (Fed) will hold a Federal Open Market Committee (FOMC) meeting on the 17th and 18th to decide on the base interest rate.

As of the previous day, 70% of investors expect the Fed to announce a small cut (0.25%p) at this FOMC meeting. This is a 10%p increase from 60% the previous day (the 5th).

Regarding the big cut (0.50%p), the possibility is seen as 30%. This is a significant drop from the 41% recorded on the 5th.

Meanwhile, the Washington Examiner reported, citing Bloomberg, that Secretary Yellen hinted at a meeting with China that day.

Specifically, Secretary Yellen said, “We could certainly go back there again,” adding, “I think the Chinese would welcome a visit and I think they would get there somehow.”

Secretary Yellen acknowledged that the United States and China have differences on economic issues, but said, “We also need to work together.”

In particular, he mentioned climate change and debt relief for developing countries as areas where the two countries could cooperate.

Earlier, Secretary Yellen made a five-day state visit to China in April and met with He Lifeng, a member of the Politburo and Vice Premier in charge of overseeing the Chinese economy. She also met with Premier Li Qiang, Beijing Mayor Yin Yong, and Finance Minister Lan Poan.

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