US economy 'quite' strong, rate hikes data dependent, says Fed's Barkin
US economic growth is "quite strong" at present, a top US central bank official said on Wednesday, adding that the pace and degree of interest rates hikes will depend on the incoming data.
In remarks prepared for a speech, the President of the Federal Reserve bank of Richmond, Tom Barkin, said that "overall, it's starting to feel like we've got some tailwinds rather than headwinds."
The main drivers of that growth, he said, were "historically high" small business confidence even as consumer optimism was at its strongest since the early 2000s.
Labour market strength, in particular, was helping to offset growing concerns about tariffs.
America's economy had generated more than 200,000 jobs per month since the beginning of the year, versus the just 80,000 to 100,000 needed to keep up with population growth.
Nevertheless, Barkin noted how according to the University of Michigan's consumer survey, the number of respondents who had mentioned trade levies had more than doubled since May.
"We've also got supply chain constraints, geopolitical instability, market volatility and the potential effects of higher interest rates," he added.
More important however was how to go about unlocking faster growth, the central bank official said.
The outlook for growth was challenging on various fronts, Barkin said, with population growth set to slow further, alongside immigration.
And the labour force participation rate was also expected to continue trending lower.
In the next downturn, the Federal Reserve might need to resort to unconventional measures again.
But the country's debt-to-GDP level, then at nearly 80%, meant authorities' room to use the fiscal lever to offset weak growth would be limited.