Philadelphia Federal Reserve Bank President Patrick Harker said on Friday that the U.S. central bank remains on track to meet its inflation goal and reiterated his support for a further two interest rate increases this year.
"Turning to inflation, things are still on track, despite a couple of months trending in the wrong direction," Harker said in prepared remarks for a speech to an economics conference in Reading, Pennsylvania.
He added that he still forecasts inflation reaching the Fed's 2 percent target around the end of this year.
The U.S. central bank has raised its benchmark interest rate twice in the past six months — in December and March — and is expected to do so again at its June 13-14 policy meeting. Some Fed officials, however, have expressed concerns about stilted progress on inflation.
Harker, who is a voting member of the Fed's rate-setting committee this year, also said the U.S. economy was now "essentially at normal," that there is very little slack left in the labor market and that he expected the national unemployment rate to drop as low as 4.2 percent by the end of 2018.
He also remained bullish on wages, estimating they would grow between 2.5 percent and 3 percent this year.
"This is a very good sign; it's one of the things that's been missing as the recovery has unfolded," he said.
U.S. job growth slowed in May, but the unemployment rate fell to a 16-year low of 4.3 percent, the Labor Department reported earlier on Friday. The same report showed average hourly earnings rose 4 cents, or 0.2 percent, last month after a similar gain in April. That left the year-on-year increase in wages at 2.5 percent.