Federal Reserve

Fed's Kaplan: I'm open to December rate hike despite really weak Sept jobs report

Key Points
  • Dallas Fed President Robert Kaplan says he's "open minded" about an interest rate hike in December, but he's "not there yet."
  • Hurricanes hit the September jobs numbers, so a lot of these job losses "will be temporary," he says.
  • The government said Friday the U.S. economy lost 33,000 nonfarm jobs in last month.
Fed's Robert Kaplan: Labor markets are very tight right now

Dallas Federal Reserve President Robert Kaplan told CNBC on Friday he's "open minded" about an interest rate hike in December, but he's "not there yet."

Kaplan, a voting member this year on the Fed's policymaking Federal Open Market Committee, said labor markets are tightening despite the weak September jobs report, which showed a monthly job loss for the first time in seven years.

"We knew that the September number would be affected by Harvey and to some extent Irma. And it has been," Kaplan said on "Squawk Box." He spoke moments after the government reported a loss of 33,000 nonfarm jobs last month.

"I'd rather look at three- to six- to nine-month trends. And I think a lot of these job losses, in our judgment, will be temporary," Kaplan said.

The consensus estimate, among economists polled by Thomson Reuters had called for job gains of 90,000 in September. The unemployment rate fell to 4.2 percent.

The Fed's next meeting is on Oct. 31 and Nov. 1, but the markets don't expect a rate hike then.

The market, however, puts the chances of the third 2017 rate increase at around 90 percent at the Fed's final meeting of the year on Dec. 12 and Dec. 13, according to CME FedWatch tool.

"I'm open minded about December, but not there yet," Kaplan said. But looking ahead to next year, he said: "We can afford to be patient."

In a CNBC interview on Thursday, Philadelphia Fed President Patrick Harker said he sees a rate hike in December and three more next year depending on "how the dynamics play out."

Harker, also a voting on the FOMC this year, said the U.S. will remain stuck in growth around 2 percent until lawmakers come up with a tax plan to boost the economy.