Amid concerns over the U.S. labor market, Treasury Secretary Janet Yellen has reassured the public about the economy's resilience, despite recent weak job reports.

What Happened: Yellen assured the public of the U.S. economy's strength, despite recent weak job reports. Speaking at the Texas Tribune Festival in Austin, Yellen said, "We're seeing less frenzy in terms of hiring and job openings, but we're not seeing meaningful layoffs," reported CNBC on Saturday.

Yellen acknowledged that job growth has decelerated compared to the post-pandemic "hiring frenzy," but emphasized that the economy is "deep into a recovery" and "basically operating at full employment." Her comments came a day after the Bureau of Labor Statistics released another month of underwhelming job data.

Nonfarm payrolls rose by 142,000 in August, falling short of the Dow Jones forecast of 161,000. This miss has stoked fears about a slowing labor market, with the S&P 500 ending the week with its worst performance since March 2023. However, the unemployment rate dipped to 4.2%, and job growth in August surpassed July's figures.

Yellen attempted to alleviate concerns about the economy, stating, "I don't see red lights flashing." The recent jobs data has sparked worries about whether the Federal Reserve can achieve a "soft landing" by raising interest rates to control inflation and then cutting them before a recession hits. Yellen expressed confidence in this path, noting the significant reduction in inflation.

Why It Matters: The context surrounding Yellen's comments is crucial. On Friday, the Treasury Secretary warned that eliminating clean energy tax credits provided by the Inflation Reduction Act would be a "historic mistake," highlighting the potential economic repercussions.

Additionally, the August jobs report released showed signs of a cooling labor market, which eased recession fears that had intensified earlier.

Further, on Thursday, economists suggested that a 0.5% rate cut by the Federal Reserve wouldn't be surprising after private payrolls fell short.

Moreover, the U.S. services sector posted a stronger-than-expected expansion in August, easing concerns about a potential economic slowdown.

• Job Creation Falls Short Of Expectations In August, Unemployment Rate Ticks Lower, Wage Growth Soars

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote