Yellen Reassures as Stock Markets React to Disappointing Jobs Report
Sunday, Sep 8, 2024 9:00 pm ET
1min read After last Friday's disappointing U.S. nonfarm payrolls report, all three major U.S. stock indices tumbled, reflecting investors' concerns.
On Saturday, U.S. Treasury Secretary Janet Yellen endeavored to calm the public and investors, asserting that the U.S. economy remains robust and is on the path to a soft landing, with no signs of an imminent recession.
According to Yellen, while the fervor seen in hiring and job openings has eased, there haven't been significant layoffs. She said at the Texas Forum in Austin: “I'm concerned about downside risks in employment, but what we see now and expect to continue seeing is a healthy and stable economy."
Yellen further elaborated that despite the slowdown in job growth compared to the post-pandemic hiring frenzy, the economy is in a "deep recovery" and "essentially near full employment."
August’s nonfarm payrolls report shed light on these dynamics. While the unemployment rate ticked down to 4.2%, meeting expectations, the addition of 142,000 jobs fell short of the forecasted 161,000.
Moreover, revisions to the prior two months' data added to the malaise, with July’s figures adjusted down to 89,000 from 114,000, and June’s to 118,000 from 179,000, collectively reducing job gains by 86,000.
The labor market's deceleration stoked fears, causing the S&P 500 to plummet 1.73% on Friday, culminating in a weekly drop of 4.25%—its steepest since March 2023. The Nasdaq also posted a two-week consecutive loss, down 5.77% last week, marking its worst weekly performance since January 2022.
Nevertheless, Yellen remained optimistic, highlighting the August report’s bright spots. She noted the slight decline in the unemployment rate and higher job growth in August compared to July.
Following Friday’s data release, Yellen commented, “Adding 142,000 jobs per month is a very healthy, sustainable pace of growth, which is what we want to see.” She emphasized that a 4.2% unemployment rate is still quite low by historical standards.
In her Saturday remarks, Yellen reiterated that despite the labor market’s moderation, it remains healthy. She projects stability in job growth, adding, "If employment growth stabilizes in this range, I will be very pleased." She also mentioned that various indicators—such as asset valuations and leverage levels—look good, with no warning signs flashing.
Yellen asserted that the U.S. is on the path to a soft landing: “To significantly lower inflation rates in the way we have is remarkable. This is what most people call a soft landing.”
On Saturday, U.S. Treasury Secretary Janet Yellen endeavored to calm the public and investors, asserting that the U.S. economy remains robust and is on the path to a soft landing, with no signs of an imminent recession.
According to Yellen, while the fervor seen in hiring and job openings has eased, there haven't been significant layoffs. She said at the Texas Forum in Austin: “I'm concerned about downside risks in employment, but what we see now and expect to continue seeing is a healthy and stable economy."
Yellen further elaborated that despite the slowdown in job growth compared to the post-pandemic hiring frenzy, the economy is in a "deep recovery" and "essentially near full employment."
August’s nonfarm payrolls report shed light on these dynamics. While the unemployment rate ticked down to 4.2%, meeting expectations, the addition of 142,000 jobs fell short of the forecasted 161,000.
Moreover, revisions to the prior two months' data added to the malaise, with July’s figures adjusted down to 89,000 from 114,000, and June’s to 118,000 from 179,000, collectively reducing job gains by 86,000.
The labor market's deceleration stoked fears, causing the S&P 500 to plummet 1.73% on Friday, culminating in a weekly drop of 4.25%—its steepest since March 2023. The Nasdaq also posted a two-week consecutive loss, down 5.77% last week, marking its worst weekly performance since January 2022.
Nevertheless, Yellen remained optimistic, highlighting the August report’s bright spots. She noted the slight decline in the unemployment rate and higher job growth in August compared to July.
Following Friday’s data release, Yellen commented, “Adding 142,000 jobs per month is a very healthy, sustainable pace of growth, which is what we want to see.” She emphasized that a 4.2% unemployment rate is still quite low by historical standards.
In her Saturday remarks, Yellen reiterated that despite the labor market’s moderation, it remains healthy. She projects stability in job growth, adding, "If employment growth stabilizes in this range, I will be very pleased." She also mentioned that various indicators—such as asset valuations and leverage levels—look good, with no warning signs flashing.
Yellen asserted that the U.S. is on the path to a soft landing: “To significantly lower inflation rates in the way we have is remarkable. This is what most people call a soft landing.”
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