Speaking after Friday’s hugely disappointing employment report, the central bank official said he still believes the employment picture to be strong, although significant areas of weakness remain.
“It’s a bit more complicated. We are restarting the economy. Many industries are struggling to grow, ”Evans said on CNBC’s“ Squawk Box ”. “I hope it’s only a month and we get a better job. I certainly think so. “
Non-farm payrolls only increased by 266,000 in April, well below the estimate of 1 million. This left the total employment of more than 7.5 million jobs below February 2020, the month before the declaration of the Covid-19 pandemic.
Evans noted that the job market continues to receive strong political support thanks to the trillions spent in Congress and the Fed’s own policies.
But as the economy improved, investors began to wonder when the Fed might start to reverse its measures. The central bank keeps short-term borrowing rates close to zero and continues to buy at least $ 120 billion in bonds per month.
“I think it will take us some time to see it in the data, assess it,” he said. “I can’t give you a deadline. “
In addition to the low number of jobs, inflation remains below the Fed’s average target of 2%. Evans said it would likely take months to reach that target, adding that he would be comfortable if inflation was a little hot for a while.
“To get an average of 2% you have to be above 2% for a while,” he said. “So 2.5% inflation rates don’t bother me as long as they’re consistent with an average of 2% over a period of time. “
While the market expects the Fed at least to slow the pace of its bond purchases by the end of 2021 or the start of the following year, Evans did not provide an estimate.
“We’re just going to have to see how the data comes out this year,” he said. “When they are stronger, when we are close to our employment mandate and inflation accelerates, we will talk about it. “
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