The latest U.S. jobs report shows that wage growth is "slowly starting to pick up" but still remains below precrisis levels, Federal Reserve Bank of Minneapolis President Neel Kashkari said June 1.
Kashkari spoke at a Minneapolis event shortly after the release of the latest U.S. jobs report, which showed that the country's unemployment rate fell to 3.8% in May, down from 3.9% in April.
Wages grew by 2.7% year over year in May, up from 2.6% in April. Kashkari said that statistic shows the U.S. is finally "seeing some signs that wage growth is slowly starting to pick up," though he said it is still below the approximately 3.5% increase the U.S. saw before the financial crisis.
The weaker figures, he said, are a sign that there is "probably still slack in the labor market" that the country's 3.8% jobless rate does not reflect. That figure would not count people who gave up on re-entering the jobs market after the recession but could still come back, he noted.
"There [are] still more people who I think would like to work if you started to see wages pick up," Kashkari said.
A low unemployment rate is also leading to other positive developments, Kashkari said, as tight labor markets are pushing some employers to become less picky about whom they hire and train people who did not have the required skills when they applied to a job.
Kashkari is not a voter this year on the Federal Open Market Committee, which is expected to raise its benchmark interest rate three or four times this year. He has been skeptical of the Fed's current path on rate hikes, saying the central bank can be patient until it sees wages and inflation rise substantially.
