US Treasury Secretary Janet Yellen sees no recession despite the economic downturn in the US.
"You're not seeing a significant increase in corporate bankruptcies, the typical types of emergencies that we associate with the word recession," Yellen said. The labor market remains exceptionally strong - not what has been seen in past episodes classified as recessions. The slowdown in economic growth was to be expected given how quickly the economy has grown as it recovered from the pandemic and job losses, Yellen said
While Yellen avoided saying directly that the US economy is not in recession, she made it clear that current developments do not correspond to her understanding of an economic downturn. "Most economists and most Americans have a similar definition of recession," she said. These included significant job losses, mass layoffs and the closure of private sector companies. None of this is currently happening in the US.
The US economy contracted again in the spring. Gross domestic product fell by 0.9 percent on an annualized basis in the second quarter, the Department of Commerce announced on Thursday. The economy had already shrunk in winter. Economists speak of a technical recession when economic output falls for two quarters in a row - as is now the case in the USA.
