https://sputnikglobe.com/20231026/soft-landing-looks-likely-for-us-economy-as-it-leads-world-consumer-spending---yellen-1114512161.html
‘Soft Landing’ Looks Likely for US Economy as It Leads World Consumer Spending - Yellen
‘Soft Landing’ Looks Likely for US Economy as It Leads World Consumer Spending - Yellen
Sputnik International
The US seems headed for a so-called 'soft economic landing' versus a recession projected by some economists as strong consumer spending helps the country lead world growth, US Treasury Secretary Janet Yellen said on Thursday.
2023-10-26T21:10+0000
2023-10-26T21:10+0000
2023-10-26T21:10+0000
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“You know what we have looks like a soft landing with very good outcomes for the US economy,” Yellen said in a televised conversation on Bloomberg TV. “So, I think there's a lot to be pleased about, [when] you see good strong-spending consumers [who] still have substantial wealth since the pandemic. And I think [this] US growth is making a contribution to stronger global outcomes as well.” Consumer spending, which accounts for almost 70% of US economic activity, was largely responsible for leading the nation’s recovery from the more than two-year long impact of the coronavirus measures. Most Wall Street economists had warned at one time or another this year about the potential for a recession as the Federal Reserve hiked rates aggressively to counter inflation. To fight inflation, the Fed hiked rates 11 times between March 2022 and August 2023, raising them by 5.25% from a base rate of just 0.25%. The central bank is scheduled to decide on rates again at its next two-day policy meeting ending on November 2. The unchanged reading on federal funds futures as of Thursday indicated the Fed will skip a rate hike again at that meeting, just as it did in September, although it will not likely cut interest rates until late 2024 or 2025 to stimulate growth. Yellen said high interest rates were a product of solid economic growth. The Commerce Department said the increase in real GDP reflected growth in consumer spending, private inventory investment, exports, state and local government spending, federal government spending, and residential fixed investment that were partly offset by a decrease in nonresidential fixed investment. Imports, a subtraction in the calculation of GDP, increased, the Commerce Department added.
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‘Soft Landing’ Looks Likely for US Economy as It Leads World Consumer Spending - Yellen
WASHINGTON (Sputnik) - The United States seems headed for a so-called 'soft economic landing' versus a recession projected by some economists as strong consumer spending helps the country lead world growth, US Treasury Secretary Janet Yellen said on Thursday.
“You know what we have looks like a soft landing with very good outcomes for the US economy,” Yellen said in a televised conversation on Bloomberg TV. “So, I think there's a lot to be pleased about, [when] you see good strong-spending consumers [who] still have substantial wealth since the pandemic. And I think [this] US growth is making a contribution to stronger global outcomes as well.”
Consumer spending, which accounts for almost 70% of US economic activity, was largely responsible for leading the nation’s recovery from the more than two-year long impact of the coronavirus measures.
Yellen’s comments came after the US Commerce Department reported on Thursday a forecast beating GDP growth for the third quarter at an annual rate of 4.9%.
The figure was well above the 4.3% growth consensus of Wall Street’s economic forecasters, although it was below the 5.4% predicted by the Atlanta Fed, a division of the Federal Reserve.
Most Wall Street economists had warned at one time or another this year about the potential for a recession as the Federal Reserve hiked rates aggressively to counter inflation.
To fight inflation, the Fed hiked rates 11 times between March 2022 and August 2023, raising them by 5.25% from a base rate of just 0.25%.
26 October 2023, 14:52 GMT
The central bank is scheduled to decide on rates again at its next two-day policy meeting ending on November 2. The unchanged reading on federal funds futures as of Thursday indicated the Fed will skip a rate hike again at that meeting, just as it did in September, although it will not likely cut interest rates until late 2024 or 2025 to stimulate growth.
Yellen said high interest rates were a product of solid economic growth.
“I think it's a reflection of the resilience that people are seeing in the US economy that we're not having a recession, that consumer spending and demand continue to be strong,” Yellen said. “The economy is continuing to show tremendous robustness and that suggests that interest rates are likely to stay higher for longer.”
The Commerce Department said the increase in real GDP reflected growth in consumer spending, private inventory investment, exports, state and local government spending, federal government spending, and residential fixed investment that were partly offset by a decrease in nonresidential fixed investment.
Imports, a subtraction in the calculation of GDP, increased, the Commerce Department added.
