Jim Bourg/Reuters
- Treasury Secretary Janet Yellen said China's economic snags pose some risks to the US.
- "China's slowdown will have the largest impact on its Asian neighbors, but there will be some spillovers to the United States."
- But Yellen remains upbeat about prospects for the US economy.
Treasury Secretary Janet Yellen sees some risks for the US stemming from China's economic troubles, but she said she remains upbeat about the health of the American economy.
"China's slowdown will have the largest impact on its Asian neighbors, but there will be some spillovers to the United States," Yellen said in post-speech comments to the media in Las Vegas, according to Bloomberg. "That said, I feel very good about US prospects overall. Let's call that a risk."
She maintained that the US labor market remains strong while inflation trends downward after the Federal Reserve's 11 interest rate hikes.
Still, the Consumer Price Index rose 3.2% in July year over year, up from June's 3.0% pace. Before the latest reading, the gauge has been easing at a steady clip for about 12 months.
"We're seeing a slowdown in [US] growth, but growth that remains healthy, a job market that is very strong and inflation that [is] coming down," Yellen said.
And despite polls illustrating many Americans' pessimism about the economy, she noted that on an individual basis many people feel more positive.
"When Americans are asked about their own personal financial situation, 70% or more say they feel very good," Yellen said. "When they're asked about the economy overall, they have weaker views."
The Treasury chief's comments follow President Joe Biden's remarks that China's economy is a "ticking time bomb," given its growth and demographic issues.
"They've got some problems," Biden said at a recent Utah fundraiser, per Reuters. "That's not good because when bad folks have problems, they do bad things."
China's post-pandemic rebound has fizzled, and now Beijing is faced with deflation, declining trade and foreign investment, a shaky housing market, and an aging population.
"Before the pandemic, China was growing at about 6%, and now it's struggling to recover," David Dollar, a senior fellow at the Brookings Institution, told Insider last week. "Consumption really didn't hold up coming out of the lockdown. The main components of GDP on the demand side — consumption, investment, net exports — they all have serious problems right now."