Cleveland Fed President Loretta Mester on Friday called the May job report “solid” but said she’d like to see further improvement
“Progress continues to be made on the labor front, which is very good news, but I’d like to see further progress,” Mester said in an interview on CNBC.
While wages were up 2% in May over the past year, they have accelerated in the past two months. Former top Obama economist Jason Furman noted that nominal wages “are on fire.”
Mester said wages were on the rise. She said one workforce development firm in her district won’t list jobs that don’t pay at least $13 an hour because he can’t find workers to take those jobs.
“This increase in wages is definitely happening as the supply of workers is constrained, but it’s not feeding into underlying inflation yet,” Mester said.
Mester said she would watch the data closely.
Drew Matus, chief market strategist at MetLife Investment Management, said he didn’t think the May job report was “going to push the Fed in one direction or the other.”
The wage gains are coming from leisure and hospitality and are mainly “just a labor clearing mechanism,” Matus said in an interview.
Goldman Sachs chief economist Jan Hatzius, an a CNBC interview, agreed the job report was not going to change lot for the Fed.
He said that some Fed hawks will look at the wage data “and say we should get on with the taper discussion,” but the majority and the Fed leadership are probably going to say the issues are transitory.
Hatzius said the “actual” taper announcement will come late this year with a slow down in asset purchases starting in early 2022.
New York Fed President John Williams, a member of Fed Chairman Jerome Powell’s inner-circle, signaled on Thursday the topic of tapering might come up at the central bank’s June meeting, although he insisted it was too soon to actually slow down the pace of asset purchases.
Mester said she was also open to talking about an end game but said she backed the Fed’s decision to be “deliberately patient” on policy moves.
Financial markets displayed no concern about Fed policy. Stocks