Federal Reserve Bank of Atlanta President Dennis Lockhart said the August jobs report showed the U.S. labor market was “far from satisfactory” one week after the central bank announced new stimulus for the economy.
“The state of employment here and now and the immediate outlook for jobs is front of mind for me and my colleagues,” Lockhart said in the text of prepared remarks in Kansas City today.
The policy-setting Federal Open Market Committee announced a new round of bond purchases last week, seeking to foster improvements in the job market. Payrolls increased less than economists expected in August and the workforce shrunk, Labor Department figures showed Sept. 7.
Speaking at a workforce development conference at the Kansas City Fed today, Lockhart focused his remarks on longer-term trends in U.S. employment.
“In today’s labor market, the skills that matter most for job finding and job keeping, as well as wage growth, encompass abilities like critical thinking and analytical skills,” he said. “Workers will need to evolve and renew their skills -- both hard and soft skills -- to keep pace with a changing workplace.”
The Fed said Sept. 13 that it will buy $40 billion in mortgage bonds a month until the labor market improves, keeping its asset purchases open-ended for the first time. The FOMC also said it will probably keep interest rates low through at least mid-2015, compared with an earlier expectation of late 2014. The Fed said it will continue its so-called “Operation Twist” program to swap short-term debt with longer-term securities to lengthen the average maturity of its holdings.
Growth in 2013 will pick up from this year’s pace, while the risks associated with the central bank’s new asset-purchase program will be “manageable,” Lockhart told reporters after the speech. The district bank chief said he would like to examine the state of the economy before deciding what policy would be appropriate once Operation Twist ends.
The Fed’s “very, very low interest rates provides borrowers the opportunity to borrow money at very cheap rates and put that to work in investment and workforce development in support of investment,” Lockhart, who votes on the FOMC this year, said in response to a question from the audience.
The central bank has kept its federal funds rate near zero since 2008.
Lockhart, a former Georgetown University professor, has led the Atlanta Fed since 2007. The Atlanta Fed district includes Alabama, Florida, Georgia, and portions of Louisiana, Mississippi, and Tennessee.