Yellen says a drop in GDP would not indicate a recession

Treasury Secretary Janet Yellen on Sunday said a contraction in gross domestic product (GDP) was not the only indicator of a recession and reiterated that the US economy is still strong despite expectations of negative data.

Yellen said so ahead of an economic report expected on Thursday that will show whether GDP growth has slowed for two consecutive quarters, traditionally a key indicator of a recession.

Speaking on ABC’s “Meet the Press” on Sunday, Yellen addressed the question of an imminent recession, saying there are several indicators that the National Bureau of Economic Research (NBER) looks at to decide if a recession is happening.

The NBER also looks at work. Rebounding from the devastation of the COVID-19 pandemic, these numbers appear strong despite some economic difficulties. Economists also look at factors such as payrolls, industrial production, real income, and spending to determine if an economy is in recession.

Yellen acknowledged that there will be a “slowdown in job creation”. Still, she added that a recession would show “general weakness in the economy.” We don’t see that now.”

“Growth is slowing globally. And I’m not saying we’re definitely going to avoid a recession, but I think there’s a way to keep the job market strong and lower inflation,” Yellen added.

While Yellen acknowledges that negative GDP growth has historically been a key indicator of recessionary conditions, she said it may not be a good indicator in the current circumstances. Yellen said if Thursday’s report shows GDP falling for a second straight quarter, it could still mean “we’re not in a recession now.”

“I would be amazed if the NBER declared this period a recession even if it was two-quarters negative growth. We have a very strong job market. If you create nearly 400,000 jobs monthly, that’s not a recession,” Yellen added.


Sharp rate hikes by the US Federal Reserve and fears of a recession in the euro zone have caused the euro to fall close to par with the dollar
Sharp rate hikes by the US Federal Reserve and fears of a recession in the euro zone have caused the euro to fall close to par with the dollar
Photo: AFP / JOEL SAGET

https://www.ibtimes.com.au/yellen-says-gdp-drop-would-not-indicate-recession-1834434?utm_source=Public&utm_medium=Feed&utm_campaign=Distribution Yellen says a drop in GDP would not indicate a recession

Fry Electronics Team

Fry Electronics.com is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@fry-electronics.com. The content will be deleted within 24 hours.

Related Articles

Back to top button