Lockhart: Still Significant Slack in the Labor Market

In an interview with FOX Business Network’s Peter Barnes, Atlanta Federal Reserve President Dennis Lockhart said Americans shouldn’t worry about a recession, despite recent turmoil in global markets.

“We’re not falling into a recession,” Lockhart said. “The economy actually is performing quite solidly, I think. Most of the data we’ve looked at recently had been positive and has confirmed my basic view-- and that is we’re growing at a moderate pace, we’re making steady progress in employment markets and I have every reason to believe that will continue.”

The Atlanta Fed President added that from the central bank’s point of view, monetary policy has been supportive of the economic growth America has achieved, but to continue to build on that momentum, the economy has to rely on itself, not accommodative policies.

One of those substantial improvements has to come in the form of inflation, for which the Fed has set a 2% target, and full employment in the labor market before the Fed hikes rates.

"I do believe there is still a considerable amount of slack in the employment markets, particularly represented by under employment by people who are working part time involuntarily,” he said.

As far as when the Fed is likely to raise rates, Lockhart said, essentially, it’s a wait-and-see approach.

“I think the next three meetings should all be live meetings and I think we should keep our options open. I don’t think I can ignore the events of the past couple of weeks, but I think I have to evaluate them as a risk to the economy. Always stay focused on the broad, general economy, not the financial economy per say, but the overall economy,” he said.