WASHINGTON (Reuters) - Philadelphia Federal Reserve Bank President Patrick Harker said on Tuesday that the current low labor force participation rate means that the central bank needs to try and get as many Americans as possible back into the workforce.
“Since growth is fundamentally growth in productivity plus growth in the labor force, there’s a real incentive for us to get every last person off the sidelines that we possibly can,” Harker said in prepared remarks to a conference on equitable transit in Scranton, Pennsylvania.
He cited research by his staff that forecasts the current labor force participation rate of roughly 63 percent is likely to drop a couple more tenths of a percentage point over the next few years.
Harker did not directly address monetary policy in his speech but said that on a national level there is little slack left in the labor market, even though it is uneven across the country.
“Other data - for instance, job openings and quits - also point to a pretty tight market,” Harker said.
He has previously said that he still expects one more interest rate rise this year and three in 2018.
Reporting by Lindsay Dunsmuir; Editing by Chizu Nomiyama