Treasury Secretary Janet Yellen said Thursday that the U.S. economy doesn’t appear to be in a recession despite two straight quarters of negative gross domestic product (GDP).
During a Thursday press conference after the release of GDP data, Yellen said she did not see signs of an economy in decline, as job growth and consumer spending remained strong throughout the year.
“Most economists and most Americans have a similar definition of recession: substantial job losses and mass layoffs, businesses shutting down, private sector activity slowing considerably, family budgets under immense strain, and a broad-based weakening of our economy,” Yellen said.
“That is not what we’re seeing right now. When you look at the economy, job creation is continuing, household finances remain strong, consumers are spending and businesses are growing.”
The U.S. GDP fell at an annualized rate of 0.9 percent over the past three months, marking the second straight quarter of negative economic growth. While two negative quarters has long been a rule of thumb for figuring out when the U.S. is in recession, economists also consider job growth and other areas of the economy when making that judgment.
Yellen acknowledged that households still face “great stress” from high inflation, which reached an annual rate of 9.1 percent in June, according to Labor Department data. While national measures of household spending and wealth remain sturdy, high inflation has taken a serious toll on low- and middle-income families, which are struggling to keep up with rising food and fuel prices.
Even so, Yellen said the slowdown in GDP showed the U.S. transitioning to “more steady, sustainable growth” after the economy grew rapidly through 2021.
Read more at The Hill.