TELETRADER News
1/12/2017, 2:36 PM (Source: TeleTrader)
more TeleTrader news

Labor participation to fall further, Fed's Harker says

For the current year, three interest rate increases would be appropriate for the United States Federal Reserve, said Patrick Harker, head of the central bank's subsidiary in Philadelphia, in remarks for his speech on Thursday in Malvern, Pennsylvania. Policymakers have largely been announcing tightening steps of 0.25 percentage points each in the current cycle. 

Currently a non-voting member of the Federal Open Market Committee, Harker expressed the opinion the labor participation rate, a key employment measure, may decline by another two percentage points in the next five years from the current level of 62.7%. He stressed the matter needs "legislative action."

The target 2% inflation could be reached this year or next, while the labor market is "more or less at full health," the policymaker said. However, he reiterated there is much room to improve with education and training. "Something I’ve heard over and over again from businesses of all sizes is that they have the jobs; they just can’t find the people. There seems to be a skills void that can’t be filled by the existing workforce," the Philadelphia Fed chief stated. Also, the decline in numbers of men aged from 25 to 54 years in the workforce is hard to explain, he added.

Baha Breaking the News (BBN) / IT