Fed Chair Janet Yellen believes the recent weakness in job creation is “transitory” and does not reflect an otherwise growing economy.
On the second day of her semiannual congressional testimony Wednesday, the central bank chief sounded more optimistic than she has over the past couple of weeks, a time during which the Fed backtracked on what had been an aggressive path forward for interest rates.
“We are seeing a pickup in growth. There’s been a sharp increase in consumer spending,” Yellen told members of the House Financial Services Committee. “I’m very hopeful that we will see a pickup in growth. We will be watching for that as we assess the economy.”
Yellen spoke a week after the Federal Open Market Committee slashed its expectations for future rate hikes. That decision in turn followed a much weaker than expected May jobs report, which showed that nonfarm payrolls increased by just 38,000.