Recession Is Not Completely Off The Table Despite Healthy Economy: Janet Yellen

U.S. Treasury Secretary Janet Yellen says inflation levels are still unacceptably high.

What Happened: A recession is still "not completely off the table," but the country appears to be on the right path to bring down inflation, Yellen told CBS News.

"We have a healthy economy, a great labor market," Yellen said. "And it's my hope that, and belief, that there is a path to bring inflation down in the context of a healthy labor market. And the data that I've seen suggests we're on that path."

According to the jobs report, U.S. employers added 209,000 jobs in June compared to May, which added 306,000 jobs. Regarding the jobs report, Yellen said the jobs report was to be expected given the labor market's expansion in recent months.   

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"But we would expect, with the job market as strong as it is now, to see a slower pace of ongoing job gains," Yellen said. "Prime age labor force participation is at the highest level in several decades, so we've seen this strong job market attract workers back to it."

Why It Matters: President Joe Biden recently said that he thinks the U.S. will avoid a recession. "It's been coming for 11 months, well guess what? I don't think it will come," he told Democratic Party donors on June 27. 

According to an analysis by Bloomberg Economics, a baseline scenario suggests that a U.S. recession could commence towards the end of 2023, aligning with a gradual decline in consumption.

A government report scheduled for Wednesday is expected to reveal that the consumer price index (CPI) increased by 3.1% compared to the previous year, Bloomberg reported.  

This marks the slowest annual growth rate since March 2021. However, when excluding the volatile energy and food costs, the core CPI is anticipated to rise by 5% compared to the previous year.

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