WASHINGTON (Reuters) - Federal Reserve Governor Jerome Powell said on Monday the U.S. labor market remains slack despite strong job growth and falling unemployment.
Powell said he felt the current 5.7 percent rate of unemployment did not accurately capture the numbers of discouraged workers and others who may be willing to rejoin the labor force if market conditions improve.
“There is slack out there ... There is very little in the way of wage gains,” Powell said in remarks at Catholic University. He said the Fed is debating whether the natural rate of unemployment has fallen, and that by some estimates it may have dropped below five percent.
If that is the case, it means the Fed has further to push on employment before inflation begins to accelerate.
Reporting By Howard Schneider; Editing by Chris Reese