Treasury Secretary Janet Yellen said Monday that the probability of a US recession this year is low as she touted job growth and low unemployment on the eve of President Joe Biden’s State of the Union address.
“You don’t have a recession when you have 500,000 jobs and the lowest unemployment rate in 50 years,” Yellen said during an appearance on ABC’s “Good Morning America.
Friday’s jobs report showed that the US economy added an whopping 517,000 jobs in January, according to the Bureau of Labor Statistics. The unemployment rate ticked down a tenth of a percentage point to 3.4% — the lowest jobless rate since May 1969.
Last summer, inflation hit a 40-year high in the United States as a confluence of pandemic-related matters (including supply chain disruptions, worker shortages and economic stimulus) and geopolitical issues, including the war in Ukraine, helped cause prices to spike. The Federal Reserve has embarked on a heavy-handed monetary tightening campaign to bring down inflation without causing unemployment to rise drastically.
“What I see is a path in which inflation is declining significantly, and the economy is remaining strong,” Yellen said on GMA. “And really that’s a path I believe is possible, and it’s what I’m hoping we will be able to achieve.”
Pressed on whether Congress will resolve the debt limit showdown, Yellen reiterated the administration’s stance that it is non-negotiable.
“America has paid … some of these bills on time since 1789; and not to do so – we produce an economic and financial catastrophe,” she said. “And every responsible member of Congress must agree to raise the debt ceiling. It’s something that simply can’t be negotiable.”
She added: “And while sometimes we’ve gotten up to the wire, it’s something that Congress has always recognized their responsibility, needs to do again.”
And asked to square Friday’s low unemployment numbers with ABC polling that 41% of Americans feel they are worse off from when Biden took office, Yellen said the “country has been through a lot,” as she pointed to stress from the pandemic, the economic impact of the war in Ukraine, and inflation.
She said Biden would be talking about the “strong and resilient” US economy when he addresses Congress Tuesday, highlighting job creation and bipartisan legislation now in implementation phase.
– CNN’s Alicia Wallace contributed to this report.
