US “A Little Beyond Full Employment” Says San Francisco Fed President

The US economy is so good it’s beyond full employment and above potential says John Williams, the San Francisco Fed president.

by Mish |

Williams Stands by his outlook for Three or Four Hikes This Year.

Federal Reserve Bank of San Francisco President John Williams said his outlook for three or four rate increases in 2017 hasn’t shifted, as the labor market shows signs of expanding beyond its sustainable rate and the economy is operating above potential.

“I haven’t changed, again, my views on what appropriate policy is” for the remainder of the year, Williams told reporters on Friday after a speech in New York, referring to his comments last month that three or four hikes would be required.
On Saturday, at an event in California, Williams said the economy “is operating above potential.”

“It’s nice to see further confirmation that that first quarter GDP number was an aberration,” Williams said of the [jobs] report. He previously said in response to questions from the audience that the U.S. “is at full employment, or maybe even a little bit beyond.”

Three more hikes coming? June is clearly on the table. By the way, is it possible to be above potential and above full employment? If so, why is wage growth so anemic?

Mike “Mish” Shedlock

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