April 11, 2012 / 10:11 PM / in 6 years

Fed's Bullard - jobs data doesn't dim outlook

ST. LOUIS, April 11 (Reuters) - Gloomy jobs data for March doesn’t signal the recovery has been thrown off course, a top Federal Reserve official said on Wednesday.

“The report was mediocre but it’s just one piece of data in the larger mosaic,” St. Louis Federal Reserve President James Bullard told reporters. “I don’t think it changes the outlook appreciably.”

Many of the Labor Department’s non-farm payrolls reports recently have been revised higher, and that could well be the case with last month’s data, Bullard said. The government report showed employers adding a meager 120,000 new jobs in March and fueled speculation the Federal Reserve would have to launch another round of monetary easing.

Bullard believes unemployment, which dipped to 8.2 percent last month, will continue to slip down below 8 percent by the end of the year and that economic growth will be around 3 percent. Viewed as a centrist on the spectrum of policymakers who seek further easing and those who would begin tightening policy soon, the St. Louis Fed leader is not a voting member of the central bank’s policy-setting panel this year.

Market anticipation of the Fed’s next move has gyrated from expectation of another bond buying program to anticipation the central bank will take no action and may begin to plan its exit from its ultra-easy stance.

The Fed cut rates to near zero more than three years ago and has bought $2.3 trillion in bonds to boost growth. A program to rebalance its bond holdings to lengthen the average maturity of its holdings -- aimed at pushing down longer-term interest rates -- comes to an end in June.

Bullard said that the end of that program, nicknamed “Operation Twist” after a 1960s era effort to twist down longer-term rates, shouldn’t be seen as the beginning of a tightening cycle.

“Markets have it a little wrong with the end of Operation Twist because they’re talking about the end of Operation Twist as if it would be the end of easing,” he said.

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