Fed's Powell says labor market still has 'a lot of slack'

NEW YORK Thu Sep 4, 2014 9:07pm EDT

NEW YORK (Reuters) - A top U.S. Federal Reserve official said on Thursday that there is still a lot of slack in the U.S. jobs market even as hiring has accelerated and unemployment has fallen in recent months.

"The labor market has improved significantly ... but there's still a lot of slack," Fed Governor Jerome Powell said in a question-and-answer session following a speech in New York.

Given the labor slack that remains, "it's hard for a breakout in inflation," Powell said.

He noted the 12-month trailing average on domestic core inflation is about 1.5 percent, below the Fed's 2 percent target.

(Reporting by Richard Leong)

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