U.S. Treasury Secretary remains optimistic about economy despite inflation and UAW strike.
OAN’s Stephanie Myers
11:28 AM – Monday, September 18, 2023
Treasury Secretary Janet Yellen confidently stated on Monday that the U.S. economy is not heading towards a recession. She pointed to the strong labor market, cooling inflation, and robust consumer spending as evidence supporting her optimistic forecast.
“I don’t see any signs that the economy is at risk of a downturn, and this is the best of all worlds to see continue strength in the economy, good strong labor market, and inflation moving down, and that is what we’re seeing,” Yellen said in an interview with CNBC’s “Squawk on the Street.”
The most recent consumer price index report showed inflation ticked up from 3.2% in July to 3.7% year-over-year in August as the Federal Reserve continues raising interest rates to combat inflation. To date, the Fed increased rates 11 times since March 2022 to their highest level since 2001.
Core inflation, which excludes food and energy prices due to their volatility, also rose on a month-to-month basis to 0.3% in August from 0.2% in July.
Yellen emphasized the need for Congress to pass a government funding bill to avert a shutdown and prevent any negative impact on the economy.
“There’s absolutely no reason for a shutdown,” Yellen said. “We’ve got a good, strong economy as we just discussed and creating something that, situation that could cause a loss of momentum is something we don’t need to risk at this point.”
When asked about the historic United Autoworkers Union strike against the big three automakers, Yellen noted it is still too early to say how this would affect the economy.
“It’s premature to be making forecasts on what it means for the economy. It would depend on how long the strike last and who’s affected by it,” Yellen remarked.
The treasury secretary noted the two sides “need to narrow their disagreements” and negotiate a contract that works for the workers and for the industry.
The strikes began Friday, September 15th, after the UAW and the “Big Three” automakers — General Motors, Stellantis, and Ford — failed to agree on a new labor contract.
Currently, the strike affects just under 13,000 workers at three auto plants, but could involve additional locations as part of UAW’s “stand up strike” plan.
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How does Treasury Secretary Janet Yellen view the current state of inflation and interest rates, and what actions has the Federal Reserve taken to address these concerns?
Title: Treasury Secretary Janet Yellen Expresses Confidence in US Economy
Introduction:
In a recent statement, Treasury Secretary Janet Yellen conveyed her belief that the United States economy is not heading towards a recession. Yellen cited several factors, including a robust labor market, cooling inflation, and strong consumer spending, to support her optimistic forecast. Her remarks come amidst ongoing concerns about rising inflation and the impact of the United Autoworkers Union strike on the automotive industry.
Labor Market and Consumer Spending:
Yellen highlighted the strength of the labor market as one of the key indicators supporting her positive outlook. She pointed out that unemployment rates remain low and emphasized the importance of maintaining this level of employment. Additionally, Yellen noted the steady growth of consumer spending, which further bolsters the economy.
Inflation and Interest Rates:
While acknowledging that inflation has increased recently, Yellen is optimistic about its future trajectory. The Treasury Secretary emphasized that the Federal Reserve has been proactive in addressing inflation concerns by raising interest rates multiple times. She pointed out that this approach has been effective in combatting inflation and preventing further economic instability.
Government Funding and Shutdown Risks:
Yellen underscored the urgency of passing a government funding bill to avoid a potential shutdown and its negative impact on the economy. She emphasized that the strong economic momentum should not be jeopardized and called for bipartisan efforts to ensure the smooth functioning of the government.
Impact of the United Autoworkers Union Strike:
Regarding the ongoing strike by the United Autoworkers Union against the major automakers, Yellen stated that it is too early to determine the exact consequences for the economy. She highlighted the importance of the two parties reaching a consensus and negotiating a labor contract that benefits both the workers and the industry. The strike initially impacted around 13,000 workers at three auto plants, but there is a possibility of its extension to additional locations as part of the union’s “stand up strike” plan.
Conclusion:
Treasury Secretary Janet Yellen’s positive assessment of the US economy provides reassurance amid concerns about a potential recession. Her observations regarding the strong labor market, cooling inflation, and robust consumer spending contribute to a favorable economic outlook. However, challenges such as the ongoing strike in the automotive industry and the need for timely government funding require careful attention to sustain the current economic momentum. By engaging in continued dialogue and implementing appropriate measures, it is hoped that the United States can navigate these challenges successfully, ensuring a stable and prosperous economy in the future.
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