Commerce Secretary Gina Raimondo on Sunday expressed optimism that the country will not fall into a major economic slowdown, arguing that many are “talking ourselves into a recession.”
Raimondo told ABC “This Week” host George Stephanopoulos that it is “normal” for economic growth to slow down to more “steady” levels as the Federal Reserve rapidly raises interest rates.
“I do think at some point, we will see a less rapid growth in the economy, but I don’t see any reason to think that we will have a serious recession,” Raimondo said.
The U.S. economy added 372,000 jobs in June, which is slightly slower than the pace of last year’s especially high growth but was still well above pre-pandemic levels.
The unemployment rate remained at 3.6 percent, a promising sign for the economy even after the Fed hiked interest rates and an increasing number of economists warn of recession risks.
“The fundamentals of this economy are very strong,” Raimondo said. “Inflation is our problem, and it is our top priority. And so I think perhaps a transition to a more traditional growth level, but I don’t think we should be talking ourselves into a recession.”
Despite the continued strong labor market, consumer confidence has taken a steep hit in recent months.
Raimondo acknowledged that inflation is “hard on folks” but noted that the gasoline costs have fallen in recent days. The national average for a gallon of gas clocked in at $4.68 on Sunday, down from when prices topped $5 in recent weeks but still well above prices last year, according to AAA.
“You’re starting to see gas prices come down, wholesale gas prices are coming down,” Raimondo said on Sunday. “But until we do get a handle on inflation, I think it’s natural for a family to be feeling that pinch.”
Inflation remains at a roughly 40-year high, with the Labor Department’s consumer price index up 8.6 percent in the 12-month stretch ending in May. The Department will report June data on Wednesday.