The US labor market is ‘healthy,’ Treasury Secretary Janet Yellen says, even as data shows conditions softening

Treasury Secretary Janet Yellen.

Treasury Secretary Janet Yellen says the US labor market is holding up, even as this week’s data shows signs it’s weakening.

“My judgment is that we have a good, healthy labor market where we continue to create jobs,” Yellen told reporters on Thursday, according to Bloomberg.

Yellen’s comments come amid a handful of new data points that show a weaker labor market picture ahead of expected interest rate cuts from the Federal Reserve.

July’s jobs report showed a surprise increase in the unemployment rate, up to 4.3% from 4.1% in June, which helped spark a market sell-off in early August.

But Yellen said that the rate is still low.

“The job market has become less tight within the last year or so, but the unemployment rate we have today by historical standards would be considered very low,” Yellen said.

The August jobs report, due Friday morning, is expected to show a slight decrease in the unemployment rate to 4.2%.

Investors are eagerly awaiting that data for further indication of labor market health, especially after recent data suggests signs of weakness.

Private payroll data showed employeres hired just 99,000 workers in August, missing estimates of 140,000 and marking a decline from 111,000 hires in July.

Job openings also took a hit, with data showing job openings fell to 7.67 million in July, marking a three-year low, according to the Bureau of Labor Statistics.

The Fed is expected to cut rates at its meeting later this month, and the amount will likely depend on labor market data. Investors currently expect a 25 basis-point cut, though markets think odds have also edged up for a 50 basis point move down.