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By Andrea Shalal
WASHINGTON, Feb 6 (Reuters) - U.S. Treasury Secretary
Janet Yellen on Monday said she saw a path for avoiding a U.S.
recession, with inflation coming down significantly and the
economy remaining strong, given the strength of the U.S. labor
market.
"You don't have a recession when you have 500,000 jobs and
the lowest unemployment rate in more than 50 years," Yellen told
ABC's Good Morning America program.
"What I see is a path in which inflation is declining
significantly and the economy is remaining strong."
Yellen said inflation remained too high, but it had been
falling for the past six months and could decline significantly
given measures adopted by the Biden administration, including
steps to reduce the cost of gasoline and prescription drugs.
U.S. Labor Department data released Friday showed job growth
accelerated sharply in January, with nonfarm payrolls up by
517,000 jobs and the unemployment rate dropping to a 53-1/2-year
low of 3.4%.
The strength in hiring, which occurred despite layoffs
in the technology sector, reduced market expectations that the
U.S. Federal Reserve was close to pausing its monetary policy
tightening cycle.
Yellen told ABC that reducing inflation remained Biden's
top priority, but the U.S. economy was proving "strong and
resilient."
Three separate pieces of legislation - the Inflation
Reduction Act, the CHIPS Act and a massive infrastructure law -
would all help drive inflation down, along with a price cap
imposed on the cost of Russia oil, she said.
Yellen called on Congress to raise the U.S. debt limit,
warning that failure to do so would produce "an economic and
financial catastrophe."
"While sometimes we've gone up to the wire, it's
something that Congress has always recognized as their
responsibility and needs to do again."
The U.S. government hit
its $31.4 trillion debt ceiling
last month, prompting the Treasury Department to warn that
it may not be able to stave off default past early June.
Republican U.S. House of Representatives Speaker Kevin
McCarthy and President Joe Biden met last week for talks on
raising the debt limit and have agreed to meet again, but the
standoff has unsettled markets.
(Reporting by Andrea Shalal and Katharine Jackson; Editing by
Toby Chopra and Chizu Nomiyama)
