San Francisco Federal Reserve Bank President John Williams was explicit in a recent paper, saying the Fed "should trade a transitory period of excessive inflation" for stronger job markets.
Among businesses, a muddled outlook
Business owners and analysts in labor-intensive industries paint a muddled picture on the ground of firms that will remain reluctant to hire unless they are jolted to a new level of certainty that the economy will expand and that the incomes of their customers will grow.
Restaurants are one of the industries that can pull less skilled and discouraged workers back into the labor force. Industry officials say there is little evidence restaurant wages, staffing levels or revenues are poised for liftoff.
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Restaurant owners "want to see things shake out," and were being very careful about only hiring when they really had to, said Scott DeFife, government affairs head for the National Restaurant Association.
In the building industry, one of the sectors that continues to worry the Fed, entrepreneurs and analysts describe an economy poised for better performance—but lodged in a circular, you-go-first stare-down among consumers, businesses and banks, with the unemployed stuck on the sidelines.
Rick Judson, owner of Charlotte-based Evergreen Development Group, said the first-time home buyers his business relies on will remain a reluctant lot until the economy improves. But that may not happen until people start buying more homes.
The building subcontractors he hires are similarly on the fence. They see a lack of housing supply, but are unwilling to hire carpenters and electricians in numbers large enough to address it, fearful the recovery might not have staying power.
"My subcontractors worry, do I hire four extra people, or hire two with the expectation that I ride it out for a few extra months," he said. "There is a mentality not of fear, but of caution. Extreme caution."