(Reuters) - Officials of the US Federal Reserve discuss a historic turning point in one of the main economic indicators, which could lead the central bank even slower than even increase their prices to the level it is now assumed to move bedrock.
Following discussions with half a dozen leaders and staff of the Federal Reserve, past and present, is the notion that the economy to fuel a much lower level of unemployment without inflation produce under construction Fed and its roots each models again the view that the central bank.
This change allows the timing of the first rate hike by the Fed expected delay until the middle of the year. But President Janet Yellen has a good reason to move with the speed of a snail from there to bring as many people as possible to return to work and push inflation to 2 percent of the target Fed.
Projections of December, showing the Fed's policy that most expect the Fed benchmark at the end of 2016 to 2.5 percent or more increases the range of 0 and 0.25 percent today hui.
On Monday became governor Jerome Powell the latest Fed to propose the "natural" unemployment rate, which fell as a full-employment level.
"Maybe lower the natural frequency is ... This is five (percent) or even lower," Powell said. It would also recently estimated unemployment rate of 5.7 percent and 5.2 percent to 5.5 percent range Fed that the unemployment rate at which inflation is likely to rise.
DOWN DESTINATION
Atlanta, Dennis Lockhart, president of the Federal Reserve said that the question of the true level of full employment must decide in focus when the Fed is whether this pushing unemployment at exceptionally low level drifting inflation to its target.
"I is quoted on the idea that the goal we are trying to achieve less than in the past'm very open," he said Friday.
Fed leaders Boston and Minneapolis Fed also said they plan to reduce their estimates to the media as well as a number of employees in other branches of the US Federal Reserve, who wanted to learn according to central bank policy to remain anonymous.
For months, Fed officials were baffled about how to accelerate the economy continues to add jobs, but does not increase wages and prices to stimulate the recovery of cement and the gradual liquidation of political crisis era.
Now there is a growing sense that the point at which attract the labor market enough to start depress wages and prices may be farther than previously thought.
The US Federal Reserve has no official goal of full employment - usually expressed as the unemployment rate, which is consistent with price stability. But precisely estimate that, given its mandate, it is for the US Federal Reserve, economic conditions, the maximum employment with price stability is the Bank maintain allow defines two percent inflation.
Since the 1960 estimates of the "natural rate" have an average of 6.3 percent, according to data published quarterly as part of the primary economic model of the Federal Reserve.
From 2013, however, his staff has been using this proportion decreased from 5.6 percent to 5 percent at the end of last year. This may be the Chairman and members of the Board of Directors of the regional Fed to reduce quarterly estimates in the next month.
Research in several banks in the Federal Reserve, published and unpublished, provides the estimation as low as 4.7 percent.
Possible reasons after Fed officials and employees of a structural downshift in growth, the aging of the workforce less likely job-hop, and the feeling that there are many people willing to return to the workforce and work for less.
Another explanation is the increase in the number of workers who want to work part-time so that both reduce labor costs and unemployment.
Many economists believe that inflation expectations are low so ingrained that act as a cap on wages and prices.
These manufacturers and researchers from the US central bank, "" minor infringements believe creating unemployment accelerating inflation, that these and other scars of the financial crisis of 2007-2009 was the unemployment rate to 10 percent, without much evidence of escalating push wages and prices ,
Despite the addition of a million jobs from October to December, wages in the twelve months to December rose by only 2.2 percent, a rate historically slow.
"The increase in wages far below the level that would be in line with price inflation of 2 percent," Powell said. Wage growth, he said, is expected to accelerate to 3.5 percent, perhaps - about the expected increase in productivity, the inflation target - before push inflation.
SHIFT OVP
Not all Fed changed his mind. Fed Chairman Cleveland Loretta Mester said, for example last week that he stick with his current estimate of 5.5 percent.
Coming out of the recession, the Fed's estimates of the normal rate of unemployment in the ranks of the long-term unemployed who lack the skills employers propulsion wanted more may reflect.
But unemployment has declined, without use of wages or higher prices, which changes the outsider. For example, the Fed President John Williams of San Francisco - a policy center overlooking the largely aligned with those of Yellen - has recently released its estimate of 5.2 percent two years ago, he thought it was about 6 percent.
However, Williams spent his research he warned against overconfidence, the estimates of the natural rate of dictation policy because of the uncertainty about these estimates.
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