JACKSON HOLE: The Federal Reserve's intensive focus on a wide range of labor market data to guide policy-making is driving a wedge between its core decision-makers and others who feel the central bank is straying from traditional guideposts.
In a speech here on Friday, Fed Chair Janet Yellen gave her most detailed analysis yet of what still plagues the American labor market five years after the recession, from stagnant wages to the large number of part-time workers to those who have given up the search for work.
She concluded that, though hard to measure, there is still considerable slack in the economy and the Fed should not rush to tighten monetary policy until the picture becomes clearer.
But with broader measures showing strong improvement, concern is building within the Fed that Yellen's novel use of a broad range of jobs data is more distracting than informative.
At least two Federal Reserve regional presidents have called on Yellen and other core policymakers Vice Chair Stanley Fischer and others who share a dovish tilt to set aside the range of jobs information and focus simply on job growth and unemployment, which they say have proven reliable over the years.
"To come in with other indicators seems to me to be falling outside the tradition of what we've done with monetary policy.
Non-farm payrolls and unemployment are probably the best indicators," James Bullard, president of the St. Louis Reserve Bank, said in an interview with Reuters.
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