Janet Yellen says China slowdown risks spillovers but no US recession

economictimes.indiatimes.com:

Janet Yellen said China’s economic slowdown risks causing ripple effects across the global economy, though she doesn’t expect a recession in the US. “Many countries do depend on strong Chinese growth to promote growth in their own economies, particularly countries in Asia — and slow growth in China can have some negative spillovers for the United States,” Yellen said in a Bloomberg Television interview Monday hours after a raft of Chinese economic data came in weaker than expected. In the US, “growth has slowed, but our labor market continues to be quite strong — I don’t expect a recession,” Yellen said.

The economy is on a “good path” to bring inflation down without a major weakening in the labor market, she said. Last week’s report on consumer prices was “quite encouraging,” Yellen said. Wednesday’s release showed that prices, excluding food and energy, rose 0.2% in June from the previous month, for the smallest advance since August 2021.

Headline inflation ran at a 3% annual pace, well down from last year’s peak above 9%. “The labor market’s been so strong, it has encouraged more prime-age people to enter” the workforce, taking some of the heat out of the market, she said. “Wage growth is moderating and inflation is subsiding.” As for China, the Treasury secretary highlighted “relatively weak” consumer spending in the relatively slow economic rebound following the country’s post-Covid reopening.