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Global Economy

US Treasury Secretary sees no recession

The job market in the US is booming, private individuals are consuming heavily – despite high inflation: For US Treasury Secretary Janet Yellen, the decisive positive signals are more important to her than the renewed minus in American gross domestic product.

The current developments do not correspond to their understanding of an economic downturn, emphasized Yellen in Washington. In doing so, she indirectly went against the usual definition of economists, according to which an economy is in a "technical recession" when economic output falls for two consecutive quarters – as has now happened in the United States.

"Most economists and most Americans define recession in a similar way: jobs are lost, there are mass layoffs, companies are closing, companies are slowing down, families are having to save. All of that is not what we are seeing at the moment," said the US Treasury Secretary .

Inflation in particular is a concern

The US Department of Commerce announced yesterday that economic output shrank by 0.9 percent from April to June. Economic output in the USA also declined in the first three months of the year.

For the people in the USA, however, the sharply rising prices are currently much more important: Inflation is higher than in the euro area, most recently the inflation rate in America was 9.1 percent – the highest since the early 1980s. The mood on the US stock exchanges was mostly good yesterday: Dow Jones and S&P 500 each gained more than one percent.

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