By Geoffrey Smith
Investing.com -- The U.S. economy is "healthy" despite signs that the labor market is cooling off, Treasury Secretary Janet Yellen said on Wednesday.
Yellen told a New York Times-organized conference that the economy would still be in good shape if the unemployment rate rises to over 4%.
Unemployment has been running at below 4% all year, as the reopening of the hospitality, entertainment, and travel sectors in the wake of the pandemic has triggered a surge in demand for staff, and exposed a shortage of workers across the economy. In large part, that's been due to older workers being slow to return to a workforce that they had left in 2020, during the wave of mass layoffs caused by COVID-19.
Her comments came two days ahead of the official labor market report for November, which is expected to show a clear slowdown in hiring and a rise in joblessness. ADP's monthly survey of private sector job creation suggested that hiring slowed sharply in November, although ADP's survey has struggled to keep its reputation as a reliable proxy for the official numbers since the pandemic started.
In contrast to the ADP numbers, the Labor Department's monthly survey of Job Openings and Labor Turnover for October showed that vacancies were still running at a historically high level of over 10.3 million, meaning that there are still far more vacancies that there are unemployed people, a ratio that indicates an extremely tight labor market overall. The department's numbers suggest that the rising trend of layoffs in the tech industry had had little impact on unemployment levels, given that those laid off could easily find alternative jobs.
Separately, Yellen expressed concern about the failure of regulators to spot and prevent the looming collapse of crypto exchange FTX.
"We want to ensure that cryptocurrency assets provide adequate customer protection," Yellen said, adding that she herself had been "surprised" by FTX's collapse.
FTX and over 130 of its affiliates have filed for chapter 11 bankruptcy protection in Delaware. However, it's unclear how far that process can proceed, given efforts by the government of the Bahamas - where FTX's parent company is based - to assert its own jurisdiction over FTX's assets.