Richmond Fed President says the U.S. labor market is in a "fragile balance".

Source: Global Market Broadcast

Richmond Federal Reserve Bank President Tom Barkin stated that the US labor market appears to be in a “weak balance,” continuing the low hiring environment of the past year.

Data released by the US Bureau of Labor Statistics on Friday showed that nonfarm payrolls decreased by 23,000 in July, and previous two months’ figures were also significantly revised down, though the unemployment rate fell to 4.1%.

“I believe this is very consistent with my observation of the labor market—which is, it is neither loose nor tight, but rather in a kind of weak balance,” Barkin said Friday during a webinar hosted by the National Association for Business Economics. He added that he currently does not see wage increases nor does he think the labor market is intensifying price pressures.

Barkin will have monetary policy voting rights next year. On Friday, he likened the fight against inflation to sailing, suggesting that if price pressures accelerate, policymakers may have to raise interest rates.

“You know, when the sail is open and you have a tailwind, it’s much easier to sail,” he said. “But if there’s a headwind, you have to tighten things up a bit—which may be the situation we’re in now.”