The head of the Federal Reserve Bank of Minneapolis today repeated his view that the U.S. economy doesn't need additional stimulus, despite zero job growth in August.
Narayana Kocherlakota last month opposed a plan by the central bank to keep interest rates low at least through mid-2013, in part because monetary stimulus had been effective at reducing the jobless rate.
Last week, August job numbers showed no job growth for the month and the national unemployment rate remained unchanged at 9.1 percent. But Kocherlakota says further stimulus still is not necessary.
"The data in August did not justify the additional accommodation provided at that meeting," Kocherlakota said. "It is unlikely, in my view, that the data in September will warrant adding still more accommodation."
Kocherlakota says standard rules of monetary policy seem to call for the central bank to stand pat or even starting to raise interest rates.
"I still see sufficient sources of strength in the economy. I think that certainly the low rate of economic growth in the first half of this year, less than one percent annualized, was a big surprise to me," he said. "But I do think that a number of the reasons why we had low economic growth in the first part of the year were temporary reasons.
Your support matters.
You make MPR News possible. Individual donations are behind the clarity in coverage from our reporters across the state, stories that connect us, and conversations that provide perspectives. Help ensure MPR remains a resource that brings Minnesotans together.