KANSAS CITY — Atlanta Federal Reserve Bank President Dennis Lockhart Thursday declared his dissatisfaction with the current labor market conditions, underlining the central bank's aggressive push to make greater headway in lowering the stubbornly high unemployment rate.
In remarks prepared for delivery at the Kansas City Fed's conference on 'The Future of Workforce Development', Lockhart — a member of the Federal Open Market Committee who voted for the Fed's expanded asset purchase program and the shift in forward guidance to late-2015 -- did not comment on monetary policy or give his outlook for the economy.
He did note, however, that "the August jobs report released earlier this month made evident that the state of U.S. labor markets is far from satisfactory."
The Fed's policymaking Federal Open Market Committee announced last Thursday that in addition to its maturity extension program, it will buy $40 billion in mortgage-backed securities a month until it sees a significant improvement in the labor market. It also pushed out its forward guidance -- how long its expects interest rates to remain close to zero -- to mid-2015 from late-2014.
In its statement announcing the additional quantitative easing measures, the FOMC did not set an end date, indicating that it would continue so long as the outlook for the labor market does not improve substantially.
In the raging debate within the Fed regarding whether more stimulus is needed or not, one the questions has been whether the slow progress on the jobs front has been due to structural or cyclical factors.
While Lockhart's vote at last week's FOMC meeting would seem to indicate he subscribes to the belief that cyclical factors are at play, meaning the Fed's actions can still have an impact on the labor market, he does caution workers against being complacent.
"My broad theme will be the need for greater adaptability and alignment of stakeholders in the workforce development arena," he said. "It's obvious that workers themselves are stakeholders. Workers will need to evolve and renew their skills -- both hard and soft skills -- to keep pace with a changing workplace."
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