"One good indicator of labour market improvement would be if we saw payroll employment increase by 200,000 each month for a number of months"
- Chicago Fed President Evans
The world's largest economy is expected to expand by 2.5% this year, and post a 3.5% growth in 2014, top Fed official Charles Evans said on Monday. In his report, he also mentioned that the unemployment rate is likely to stand around 7.4% this year and will edge down to 7% by the end of 2014. At the same time, interest rates will be left at their record low until the jobless rate falls to 6.5%. However, Evans called for a fresh round of stimulus, saying the Fed should keep its overall level of asset purchases at $85 billion a month for most, if not all, of 2013. Such action will only bring to a minimum increase in the inflation.
"One good indicator of labour market improvement would be if we saw payroll employment increase by 200,000 each month for a number of months. We've been averaging about 150,000, but it's been very uneven ... we need a higher pace of employment growth and less volatility in that pace," Chicago Fed President Evans said.
"I don't think we should be in a mode where we are waiting to see what the next few data releases bring," Evans told a seminar at the Hong Kong Bankers Club. "We are well past the threshold for additional action; we should take that action now."
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