Chicago Fed President Austan Goolsbee said Friday that while the January job report was impressive on the surface, underlying details were not as strong.
“The headline number was almost breathtaking,” Goolsbee said in an interview on the “PBS NewsHour” program.
“If you peel back the onion a little bit, it’s not as strong as that headline number advertises … but it’s still very strong,” he said.
In particular, he noted that hours worked fell 0.2% last month despite the jump in net new jobs.
Goolsbee sidestepped questions about whether the data meant there would be no interest rate cut at the central bank’s March policy meeting.
“I don’t like to tie our hands ahead of time when we’ve got weeks and months of data to come in,” Goolsbee said.
In a separate interview earlier Friday, former Fed Vice Chairman Richard Clarida said he thought June would be the most likely time for a first rate cut of the cycle, given the strength of the January jobs report. Many economists share this view, while traders in derivatives markets think the first cut will come sooner in early May.
Asked about former President Donald Trump’s allegation that Fed Chairman Jerome Powell was being political in his interest-rate decisions, Goolsbee said that people should not be concerned.
“The Fed is totally transparent,” the Chicago Fed president said, noting that the Fed puts out a summary of its interest-rate policy meetings and later a full transcript. Decisions are based “on actual economic conditions and data,” he added.
Goolsbee said it was a “fair point” to make that Americans are uncomfortable economically given how high grocery prices have risen since 2021.
To get inflation back to where it was several years ago, the Fed would have to “crank” rates significantly higher, he said, adding that such a move is “not in our card deck.”
finished higher on Friday, while the 10-year Treasury yield
jumped above 4% after the jobs report was released.