US Treasury Secretary Janet Yellen has said that despite slowing growth in China, the United States economy is not expected to go into recession and is on a “good track” to contain inflation.
in an interview with Bloomberg Speaking on behalf of India during the Group of 20 finance officials meeting on Monday, Yellen said the US is making good progress in bringing down inflation.
He said the US economy is on a “good track” in containing inflation, despite fears that slowing growth in China could have ripple effects on other economies.
Yellen said, “For the United States, growth has slowed, but our labor market remains quite strong. I do not expect a recession.” “The recent inflation numbers were quite encouraging.”
He added that many countries depend on strong Chinese growth to fuel growth in their economies, especially countries in Asia – and that slower growth in China could have “some negative consequences for the United States.”
Data on Monday showed China’s economy grew 6.3% in the second quarter on a year-on-year basis, faster than 4.5% in the first three months of the year but well below expectations of 7.3%, as the country and Demand abroad had weakened. ,
Last week’s report on consumer prices was “quite encouraging,” Yellen said. Wednesday’s release showed that prices, excluding food and energy, rose 0.2% from the previous month in June, the smallest gain since August 2021. Headline inflation ran at an annual pace of 3%, well below last year’s peak of over 9%.
“The labor market is strong enough that it has encouraged older people to enter the workforce,” taking some of the market heat off, he said. “Wage growth is slowing and inflation is slowing.”
As for China, Yellen highlighted “relatively weak” consumer spending in the country’s relatively slow economic return after its post-Covid reopening. Monday’s data showed gross domestic product grew less than 1% from the first quarter, while retail sales for June rose less than forecast.
“It looks like consumers are more focused on building back their savings buffers,” Yellen said.