Federal Reserve Chairman Jerome Powell delivered a bullish assessment of the U.S. economy and the job market on the eve of the scheduled release of November employment data.
“Our economy is currently performing very well overall, with strong job creation and gradually rising wages,’’ Powell said in the text of a speech to be delivered to a housing conference in Washington on Thursday. “In fact, by many national-level measures, our labor market is very strong.’’
Economists are forecasting a moderating but still strong pace of hiring in the Labor Department’s monthly report Friday at 8:30 a.m. in Washington, despite some job-market data this week showing the potential for cooling.
The figures are projected to show that U.S. employers added 198,000 jobs to nonfarm payrolls in November. That’s still considered healthy, though it would be less than October’s 250,000. The unemployment rate probably held at 3.7 per cent, the lowest since 1969, while wages likely advanced 3.1 per cent from a year earlier, matching the fastest pace since 2009.
Powell’s comments are his final scheduled public remarks before the Fed goes into a blackout period before its Dec. 18-19 policy meeting, at which officials are expected to raise interest rates by a quarter percentage point fore the fourth time this year.
Investors, though, have reduced their bets on 2019 rate increases amid stock-market losses and heightened fears of a trade war between the U.S. and China. Trading in federal funds futures shows the odds of a rate increase next year have dwindled to less than a single quarter-point move.
The Fed has lifted borrowing costs eight times since December 2015 in a bid to keep the economy from overheating and is nearing the policy setting that neither boosts nor slows growth. With this so-called neutral rate in sight, Fed officials are cautioning that further moves should continue to be gradual and dependent on incoming economic data.
In his speech to the Housing Assistance Council conference, Powell said he recognized that not all Americans were reaping the full benefits of the economic expansion.
“Despite positive trends in national data, the benefits of the ongoing economic expansion are still not reaching some communities,’’ Powell said.
--With assistance from Katia Dmitrieva.