Yellen's recession assessment

U.S. Treasury Secretary Janet Yellen dismissed concerns that a weakening labor market signals a looming recession. U.S. Treasury Secretary Janet Yellen said on Tuesday that economists who predicted high U.S. unemployment would be necessary to rein in inflation are “eating their words” because the economy has shown little weakness in the labor market or consumer demand and prices are moderating. “We are not seeing the usual signs of a weakening labor market that would make you fear a recession,” Yellen told reporters while on a trip to Mexico City. Referring to the factors needed to bring inflation under control, Yellen said, “Economists who said it would take very high unemployment to do that are eating their words. “So it doesn’t seem like it warrants higher unemployment,” he said. The U.S. Labor Department is scheduled to release October employment data on Friday, a key signal about whether Fed policymakers will keep interest rates on hold at current levels or consider easing monetary policy. The September unemployment rate rose to 3.9% as labor force growth slowed, and new data released Tuesday showed further cooling in the labor market; the number of open jobs for every unemployed person in October was 1.34, the lowest level since August 2021 and down from 1.47 in September.