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As inflation spurs Federal Reserve rate hike, Chair Powell maintains: ‘I do not think the U.S. is in a recession’

Federal Reserve Chairman Jerome Powell speaks about whether the U.S. is in a recession after the Fed’s decision to raise interest rates by 75 basis points on July 27, 2022.

Video Transcript

JEROME POWELL: I don't-- I do not think the US is currently in a recession. And the reason is there are just too many areas of the economy that are performing, you know, too well. And of course, I would point to the labor market in particular.

As I mentioned, it's true that growth is slowing. And for reasons that we understand, really, the growth was extraordinarily high last year, 5.5%. Would have expected growth to slow. There's also more slowing going on now.

But if you look at the labor market, you've got growth-- I think payroll jobs averaging 450,000 per month. That's a remarkably strong level for this state of affairs. The unemployment rate at near a 50-year low at 3.6%. All of the wage measures that we track are running very strong.

So this is a very strong labor market and it's just not consistent with-- you know, 2.7 million people hired in the first half of the year. It doesn't make sense that the economy would be in recession with this kind of thing happening. So I don't think the US economy is in recession right now.