- Eric Rosengren, Boston Federal Reserve bank president
The US labour market strengthened in October, the Fed's broad-based barometer showed. The Labor Market Conditions increased to 4 points, compared with the previously reported 2.5 points a month earlier, with a positive number signalling improvement in conditions. The gauge has averaged at 4.1 points so far this year, indicating steady improvement in the jobs market. Last week's report from the Department of Labor showed firms hired more than 200,000 new employees every moth through October, the best such streak since the mid-90s, with unemployment rate falling to 5.8% down from 5.9%. Nevertheless, the labour market appeared to be not yet tight enough to create meaningful wage pressures. In the latest statement on monetary policy, Fed policy makers said that "underutilization of labor resources is gradually diminishing" compared with September when officials still saw "significant" slack in the jobs market.
Meanwhile, Boston Federal Reserve bank president Eric Rosengren urged the Fed to combat low inflation as vigorously as it would fight a sharp run-up in prices or risk of such a prolonged slow growth as in Europe or Japan. He highlighted that failure to bring inflation to target increases the risk that investors and consumers would start sharing deflationary thinking, changing their spending and investment patterns, which may undermine US growth.
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