Yellen responds to talk of a recession and the state of the U.S. economy

A recession ‘is not what we’re seeing right now’ says U.S. Secretary of Treasury Janet Yellen. Yellen held a press conference on July 28, 2022, the day after the Fed raised interest rates by 75 basis points, and discussed a possible recession and U.S. economy.

Video Transcript

JANET YELLEN: Most economists and most Americans have a similar definition of recession-- substantial job losses and mass layoffs, businesses shutting down, private sector activities slowing considerably, family budgets under immense strain. In sum, a broad-based weakening of our economy. 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.

In the last three months, our economy has created over 1.1 million jobs. In the three months beginning each modern recession outside of the pandemic, our economy lost 240,000 jobs on average. Spending by businesses and consumers, the core of our economic activity, rose by 3% in the first quarter of this year and continued to expand in the second. Industrial output, the measure of our manufacturing mining and utilities sectors, has shown strong average growth over the first half of the year, compared to sharp average declines during past recessions.