Richmond Federal Reserve Bank President Tom Barkin stated that the U.S. labor market appears to be in a state of 'delicate equilibrium,' continuing a sustained period of low hiring activity.
Data released Friday by the Bureau of Labor Statistics showed nonfarm payrolls fell by 23,000 in July, while figures for the previous two months were also significantly revised downward. However, the unemployment rate edged down to 4.1%.
"I think this is very consistent with my observation of the labor market, which is that it's neither loose nor tight, but rather a kind of delicate equilibrium," Barkin said during a webinar hosted by the National Association for Business Economics on Friday. He noted that he is not currently seeing wage increases and does not believe the labor market is exacerbating price pressures.
Barkin will gain a vote on monetary policy next year. On Friday, he compared the fight against inflation to sailing, suggesting that policymakers might have to raise interest rates if price pressures accelerate.
"You know, sailing is much easier when the sails are open and the wind is at your back," he said. "If you're heading into the wind, you have to tighten up a bit, and that may be the environment we're in right now."
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