Mr. Powell only glancingly addressed the March employment report, released Friday by the Labor Department, which showed job growth slowing significantly from January and February and the unemployment rate holding steady at 4.1 percent. The labor market added 103,000 jobs in March — though the monthly average for the year remains above 200,000 — and showed wage growth ticking up slightly.
Mr. Powell ticked off several indicators that support the idea that the economy is running near so-called maximum employment, which economists generally consider to be the lowest unemployment rate that does not spur rapid inflation. But he said other indicators, such as labor-force participation that remains depressed by historical standards, suggest that the economy has not yet reached that point. He particularly noted still-lagging wage growth. “I will be looking for an additional pickup in wage growth as the labor market strengthens further,” he said.
Fed officials raised interest rates by a quarter of a percentage point at their most recent meeting, in March, to a range of 1.5 percent to 1.75 percent. Officials indicated that they considered the economy and labor market to be healthy, and that they expected to raise rates twice more this year and three times in 2019.
Mr. Powell, like his predecessor, Janet L. Yellen, cast that gradual series of increases as a carefully planned strategy to ensure that the Fed will not need to raise rates abruptly in the event of a steep rise in inflation. “The F.O.M.C.’s patient approach has paid dividends and contributed to the strong economy we have today,” he said.
He closed his prepared remarks by cautioning that events could force the central bank to change course. “Our views about appropriate monetary policy in the months and years ahead will be informed by incoming economic data and the evolving outlook,” Mr. Powell said. “If the outlook changes, so will monetary policy. Our overarching objective will remain the same: fostering a strong economy for all Americans — one that provides plentiful jobs and low and stable inflation.”
Analysts said Friday that they did not see anything in the latest jobs report that would cause the Fed to deviate from its current path.
“The Fed will look beyond these temporary disruptions,” said Beth Ann Bovino, chief United States economist at S & P Global Ratings.
Analysts at Bank of America Merrill Lynch said Friday that other factors, including subdued inflation data and rising geopolitical risks, could cause Mr. Powell to sound “more cautious” in his outlook.