Yellen: strong US GDP growth signals productivity gains, not inflation
U.S. Treasury Secretary Janet Yellen attends a press conference after a meeting with Chinese Vice Premier He Lifeng, ahead of a U.S.-hosted APEC (Asia-Pacific Economic Cooperation) Summit in San Francisco, California, U.S., November 10, 2023. REUTERS/Carl
By David Lawder
CHICAGO (Reuters) — U.S. Treasury Secretary Janet Yellen said on Thursday that surprisingly strong economic growth in the fourth quarter was a «good thing» that signals productivity gains and healthy spending without increases in inflationary pressures.
Reacting to the U.S. Commerce Department’s report that U.S. gross domestic product rose 3.3% in the quarter, Yellen said it included core inflation at 2%, «exactly the Fed’s target,» with lower readings for headline inflation.
«I see this as a good thing, reflective of strong, healthy spending and productivity improvements and not, most likely, creating an inflationary challenge,» Yellen told reporters after a speech to the Economic Club of Chicago.
She said it was unclear whether productivity gains would persist, or whether artificial intelligence technologies were adding to these.
«It may be that we’re having a period of more rapid productivity growth than we’ve seen as a long run average in recent years for the U.S.» she said. «It’s totally speculative. Is this something that’s temporary? Is it a longer lasting thing?»
Yellen added that there were many articles written about the potential for AI to drive productivity, «but it would be completely speculative to go there.»
«To me, more output is a good thing if it doesn’t signal worrisome pressures in the labor market,» she added.
