Yellen downplays US recession risk ahead of economic reports
WASHINGTON— Treasury Secretary Janet Yellen said the U.S. economy is slowing but pointed to healthy hiring as proof that it is not yet in recession.
Yellen spoke Sunday on NBC’s “Meet the Press” before a slew of economic reports will be released this week that will shed light on an economy currently besieged by rampant inflation and threatened by higher interest rates.
The data will cover sales of new homes, consumer confidence, incomes, spending, inflation and overall output.
The highest-profile report will likely be released Thursday, when the Commerce Department will release its first estimate of the economy’s output in the April-June quarter. Some economists forecast it may show a contraction for the second quarter in a row. The economy shrank 1.6% in the January-March quarter.
Two consecutive negative readings is considered an informal definition of a recession, though in this case economists think that’s misleading.
Yellen argued that much of the economy remains healthy: Consumer spending is growing, Americans’ finances, on average, are solid, and the economy has added more than 400,000 jobs a month this year, a robust figure. The unemployment rate is 3.6%, near a half-century low.
“We’ve got a very strong labor market,” Yellen said. “This is not an economy that’s in recession.”
Still, Yellen acknowledged the economy is “in a period of transition in which growth is slowing,” from a historically rapid pace in 2021.
She said that slowdown is “necessary and appropriate,” because “we need to be growing at a steady and sustainable pace.”
Slower growth could help bring down inflation, which at 9.1% is the highest in two generations.
Still, many economists think a recession is on the horizon, with inflation eating away at Americans’ ability to spend and the Federal Reserve rapidly pushing up borrowing costs. Last week, Bank of America’s economists became the latest to forecast a “mild recession” later this year.
On Wednesday, the Federal Reserve is likely to announce its second 0.75% point increase in its shortterm rate in a row. Fed policymakers are expected to keep hiking until its rate reaches about 3.5%, which would be the highest since 2008.
Gas prices falling: The average U.S. price of regular-grade gasoline plunged 32 cents over the past two weeks to $4.54 per gallon.
Industry analyst Trilby Lundberg of the Lundberg Survey said Sunday that the continued decline comes as crude oil costs also fall.
“Further drops at the pump are likely as the wholesale gasoline price cuts continue making their way to street level,” Lundberg said in a statement.
The average price at the pump is down 55 cents over the past six weeks, but it’s $1.32 higher than it was one year ago.
Nationwide, the highest average price for regular-grade gas was in Los Angeles, at $5.65 per gallon.
The lowest average was in Baton Rouge, Louisiana, at $3.90 per gallon.
Mideast tensions: Israeli troops and special forces on an arrest mission exchanged
fire with Palestinians barricaded in a house in the occupied West Bank, Israeli police said Sunday. The local rescue service said two Palestinians were killed.
Israeli police said a number of armed Palestinians were killed during the hourslong battle deep inside the city of Nablus, without specifying.
Police said no Israeli forces were wounded.
The Palestinian Red Crescent said the two men were killed in clashes with the military in Nablus and identified them as Aboud Sobh, 29, and Muhammad Al-Azizi, 22. It also said 19 Palestinians were wounded, including two critically.
Israeli Prime Minister Yair Lapid said the suspects had been wanted for a series of shootings.
Nabil Abu Rdeneh, spokesman for Palestinian President Mahmoud Abbas, condemned the violence, saying it was a result of Israel’s occupation of lands Palestinians seek for an
independent state.
Migrants saved: Italian vessels recovered five bodies and rescued 674 people packed on a fishing boat off the Libyan coast, the Italian Coast Guard said Sunday. European charities reported saving more than 500 more.
Some of the survivors had to be plucked from the sea in the Italian operation that was carried out Saturday 120 miles off the coast of Calabria by a Navy mercantile ship, three Coast Guard patrol boats and a police boat.
It’s not yet known how the five people died.
In separate operations, the German charity Sea-Watch said it rescued 444 migrants trying to cross the Mediterranean on rickety smugglers’ boats. The Sea-Watch 3 vessel carried out the five operations over 24 hours.
In addition, the European charity SOS Mediterannee said its rescue ship Ocean Viking have saved 87
people, including 57 unaccompanied minors, from an overcrowded rubber boat off the Libyan coast.
Japanese volcano: A volcano on Japan’s main southern island of Kyushu erupted Sunday night, spewing ash and rocks. There were no immediate reports of damage or injuries in nearby towns but residents were advised to evacuate.
Japan’s Meteorological Agency said Sakurajima volcano erupted at around 8:05 p.m., blowing off large rocks as far as 1 ½ miles away in the southern prefecture of Kagoshima.
The agency said it has raised the eruption alert to the highest level of five and about 120 residents in two towns facing the volcano were advised to leave their homes.
A gunman opened fire on university campus in the Philippine capital region Sunday, killing a former
Philippines shooting:
town mayor and two others before a graduation ceremony, police said.
The suspect was captured in a car he commandeered trying to escape the Ateneo de Manila University in Quezon City, police said. He was blocked by witnesses and authorities outside the university gates.
The university was put under lockdown and the graduation ceremony at the law school was canceled, police said.
Investigators were trying to determine a motive for the attack, but Quezon City police chief Brig. Gen. Remus Medina said the suspect, apparently a doctor, had a long-running feud with Rosita Furigay, a former mayor of Lamitan town in southern Basilan province.
She died in the attack with her aide and a university guard. Furigay’s daughter, who was supposed to attend the graduation, was wounded, a police report said.