Economy4 hours ago (May 21, 2021 02:35PM ET)
© Reuters. FILE PHOTO: Dallas Federal Reserve Bank President Robert Kaplan speaks during an interview in his office at the bank’s headquarters in Dallas, Texas, U.S. January 9, 2020. REUTERS/ Ann Saphir/File Photo
By Ann Saphir and Howard Schneider
WASHINGTON (Reuters) – Federal Reserve officials and new Dallas Fed data have begun lowering expectations for May jobs growth in the United States as business hiring plans continue to outrun the supply of people able or willing to work.
Dallas Federal Reserve president Robert Kaplan said Friday that hiring difficulties have continued through May, and will likely lead to another weak jobs report following the lower-than-expected 266,000 positions added in April.
A survey published by the Dallas Fed earlier in the day, meant to provide a mid-month check on national employment trends, pointed to weakening job growth as well.
That has been attributed to a number of factors including ongoing unemployment benefit payments and a lack of child care, and “these structural issues, which we saw in the report for April…all those tensions are not going to go away” immediately, Kaplan said at a Dallas Fed conference on technology. “We think you are going to see another odd or unusual report…Businesses are telling us they got plenty of demand but they cannot find workers either skilled or unskilled.”
Fed officials had hoped to see a “string” of months in which a million or more new jobs were added to U.S. payrolls, helping the country quickly claw back the 8.2 million positions still missing from before the pandemic.
St. Louis Fed president James Bullard earlier this week however called that figure “hyped up,” and said a “more realistic” expectation was for perhaps half a million jobs a month.
The comments highlight a growing dilemma at the Fed as it wrestles over how long to keep emergency levels of economic support in place as the pandemic ebbs and the economy revs up for what may be the strongest year of economic growth since the early 1980s.
Philadelphia Fed President Patrick Harker on Friday became the second Fed official, along with Kaplan, to urge a faster start to talks over when and how quickly to reduce the central bank’s $120 billion in monthly bond purchases.
“It is something that, in my mind, we should start to have a conversation about sooner rather than later,” Harker said at a virtual event organized by the Washington Post.
Atlanta Fed president Raphael Bostic and Richmond Fed president Thomas Barkin, speaking at the same event with Kaplan, both stuck to their positions that more hiring needs to take place before they’d be ready to discuss a bond purchase “taper.”
“Right now we are not in a position where that’s in play for moves,” Bostic said, a view that is currently a near consensus at the Fed, even as some begin to warn of a possibly overheating economy.
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.