Yellen: Economy shows no signs of recession

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FILE – In this Dec. 13, 2017 file photo, Federal Reserve Chair Janet Yellen speaks during a news conference following the Federal Open Market Committee meeting in Washington. Yellen on Monday, April 5, 2021, urged the adoption of a minimum global corporate income tax, an effort to offset any disadvantages that might arise from the Biden administration’s proposed increase in the U.S. corporate tax rate. (AP Photo/Carolyn Kaster, File)

(The Hill) — Treasury Secretary Janet Yellen said Sunday that growing consumer spending, industrial output, credit quality and other economic indicators don’t suggest the economy is in a recession, although she acknowledged that “way too high” inflation is straining the system.

“This is not an economy that is in recession,” Yellen told moderator Chuck Todd on NBC’s “Meet the Press.” 

Businesses and consumers are seeing the economy slow after a rapid growth spurt last year, which brought the labor market back to life after the COVID-19 pandemic, the secretary said. But this transitional slowdown is “necessary and appropriate” given the rapid changes.

“You don’t see any of the signs. Now, a recession is a broad-based contraction that affects many sectors of the economy. We just don’t have that,” Yellen said, but she acknowledged the impacts of uncommonly high inflation numbers

She said she expects federal government policies aimed at controlling inflation to be successful, putting downward pressure on record gas prices, rising food costs and other economic problem areas for everyday Americans, with help from the Biden administration. 

“We’ve cut the deficit by a record one and a half trillion dollars this year… We’ve seen gas prices just in recent weeks come down by about 50 cents and there should be more in the pipeline. And hopefully, we will pass a bill that will lower prescription drug costs and maintain current levels of health care costs.”

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