For the US Treasury Secretary, the latest data on US employment, much better than expected, and the average increase in wages in 2023 confirm the good health of the US economy: “American workers are making careers and progress is middle-income families are very evident”
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For US Treasury Secretary Janet Yellen, the US economy has achieved a long-sought soft landing, an event in which high inflation is tamed without significantly damaging the job market. “What we’re seeing now I think can be described as a soft landing, and my hope is that it continues,” Yellen explained in an interview with CNN.
Data released on January 5 shows that job and wage growth in December exceeded expectations, with +216,000 employed in the United States. The report, which confirmed the still current risk of a rise in inflation, pushed investors to reduce bets on the fact that the Federal Reserve would start cutting interest rates starting from March.
In the interview Yellen – previously president of the US Federal Reserve – focused on the latest wage data, according to which during 2023 the average hourly wage in the US increased by 4.1 percent. Considering that consumer inflation for the current year is forecast by economists at 3.2%, this means that wages have exceeded price growth in 2023.
Support for the Fed’s decisions
Yellen declined to comment on how she thinks the Fed should proceed, but stressed that the US central bank has managed monetary policy well. “The path followed by the labor market, the economy and inflation suggests that the Fed has made a series of good decisions,” she explained.
Over the past two years, the economist at the helm of the US Treasury has consistently rejected the darkest forecasts for the US economy, even as the central bank has pursued an aggressive rate-hiking campaign through much of 2022 and 2023 .
While not completely ruling out a recession, Yellen has repeatedly said she sees a “path” to a so-called soft landing. Against this backdrop, Yellen has taken something of a victory lap in recent weeks. In December you said that economists who had predicted a recession were now “eating their words,” and in the CNN interview you repeated your criticism: “There has been a lot of pessimism about the economy that has proven to be unwarranted“, he said. «A year ago, most forecasters believed we would fall into recession. Obviously, that didn’t happen.”
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2024-01-05 17:31:56
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