CHATTANOOGA (Reuters) - The Federal Reserve would like to see broad improvement in the U.S. labor market before pulling back on its latest monetary stimulus plan, Atlanta Fed Bank President Dennis Lockhart said on Thursday.
Lockhart said he wanted central bank officials to offer more clarity about what such progress might look like, adding that no single indicator - even the unemployment rate - would be looked at in a vacuum.
"It's appropriate to be cautious about relying on a single indicator of labor market trends," he said, noting that a decline in the jobless rate that reflects a drop in labor force participation would not be seen as positive.
Lockhart said he would like to see employment growth that reduces underemployment, such as part-time work for those who seek full-time jobs.
The Labor Department will release the October jobs report on Friday. Economists polled by Reuters expect it to show non-farm payrolls increased 125,000, while the jobless rate ticked up to 7.9 percent from 7.8 percent.
The U.S. economy remains stuck in a low-growth mode, Lockhart said, as reflected in the latest report showing gross domestic product expanded 2 percent in the third quarter.
On the bright side, inflation has also remained contained, showing an underlying trend close to the Fed's 2 percent target, while inflation expectations remain subdued.
Lockhart said the housing sector was finally showing widespread signs of recovery, reflected in everything from stronger sales and construction to higher property values.
However, large population of areas devastated by superstorm Sandy this week could reduce fourth-quarter U.S. economic growth, he said.
"Given the population of the Northeast and the density of economic activity in the Northeast, it would not surprise me if there is a measurable fourth quarter effect of the storm, in GDP terms," Lockhart told reporters after a speech.
He added that reconstruction in the coming months could also boost gross domestic product.
(Editing by Neil Stempleman)