MNI BRIEF: Fed's Barkin Is Sanguine On Both Jobs, Inflation

Federal Reserve Bank of Richmond President Tom Barkin on Thursday cited reasons to be sanguine about both the labor market and inflation, noting limits to the downside risk for both sides of the Fed's dual mandate goals. 

A "noticeable shift" in the labor market in recent weeks has been marked by anecdotal reports of more labor availability, but immigration curbs and retirements are shrinking supply apace with available jobs, Barkin told the Aiken Chamber of Commerce in South Carolina, also noting that consumer demand remains solid. 

Businesses say they still plan to pass higher costs to consumers, but price setters seem reluctant to make price increases too visible. Productivity growth seems to be improving significantly, and consumers are trading down. "That'll limit the magnitude of price increases in inflation," he said. "So the ground may look shaky today, but I just think there are good reasons to think there are countervailing forces that will limit the downside." (See: MNI POLICY: Fed Set To Keep Cutting Rates Despite Missing Data)