Yellenspeak

6 June 2016 By Gina Chon Follow @GinaChon

The Fed chair tried to assure that things aren’t so bad after dismal May payroll figures. She cited positives, like rising wages, but also gave a laundry list of risks. It’s a transparently awkward balance to allow the Fed to stay steady on rates and signal the economy’s OK.

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Federal Reserve Chair Janet Yellen said in a speech on June 6 that the “positive economic forces outweighed the negative” as the central bank considers raising interest rates at its next meeting. Yellen made her comments a few days after the latest U.S. jobs report, which showed 38,000 positions were added in May. Yellen said that report was “disappointing” and it was worth watching. But she emphasized that “one should never attach too much significance to any single monthly report.”

She noted other positive improvements in the labor market, such as increasing compensation. Average hourly wages rose by 5 cents in May to $25.59 from April, the Bureau of Labor Statistics said on June 3.

She also emphasized that the Federal Reserve was not on a preset course and the possible risks were slowing demand and productivity, inefficient inflation growth and global risks, such as the potential exit of Britain from the European Union. She added that gradual interest-rate rises were likely warranted but she did not give a timetable. The central bank meets for two days starting June 14 to consider an interest-rate rise.

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