FOMC Minutes: Labor Market Gains Slowed, But Still Improved from Earlier this Year

In the minutes of their October 27 – 28th Federal Open Market Committee (FOMC) meeting, Fed officials outlined their decision to hold off on raising the federal funds rate.

Nearly all members agreed that even though job gains had slowed over the intermeeting period, indicators showed that underutilization of labor resources had diminished, and that economic activity would expand at a pace consistent with the Fed’s dual mandate.

Though most participants agreed that the economy would continue to expand, several indicated that in the current low interest rate environment, the Committee should consider providing “additional monetary policy accommodation if the outlook for economic activity were to weaken to a degree that seemed likely to undermine continued progress in labor market conditions.”  The minutes did not detail what this additional accommodation would include.

Of the voting members of the Committee, all but Richmond Federal Reserve President Jeffrey Lacker voted to hold the target rate between 0 and 25 basis points. The committee did leave the door open for a December rate hike however. “In determining whether it will be appropriate to raise the target range at its next meeting, the Committee will assess progress – both realized and expected – toward its objectives of maximum employment and 2 percent inflation.”

Read the FOMC minutes.