Dennis Lockhart speaks to members of the Rotary Club at the Chattanooga Trade Center.The Federal Reserve will continue its bond-buying program to keep interest rates near historic lows until the U.S. labor market returns to healthy levels, Federal Reserve Governor Dennis Lockhart said Thursday.
In a luncheon speech to the Chattanooga Rotary Club, the president of the Federal Reserve Bank of Atlanta spoke out against leaning too heavily on the national unemployment rate to determine when the Fed should put the brakes on its monetary easing policy. Lockhart said other measures such as the number of full-time workers and the size of the labor force must also be used to judge the pace of the recovery.
“I would not interpret discouraged workers dropping out of the labor force as a sign of improvement, even if the unemployment rate falls as a consequence,” he said.
The unemployment rate fell in September to 7.8 percent, after peaking at 10 percent in October 2009, and the labor department today will release its October jobs report – the last before the presidential election.
The U.S. economy has grown at about a 2 percent rate since the recovery began 40 months ago – what Lockhart called an economy “stuck in slow-growth mode.”