The president of the San Francisco Federal Reserve said the huge increase in new U.S. jobs in January was a “wow” report, but she stressed the central bank needs more information before it decides how much further to raise interest rates. “What I am seeing is a strong labor market,” Mary Daly said in an interview on Fox Business.
Yet she also said it’s premature to draw conclusions. The Fed needs to see more data on the economy, she reiterated, before deciding its next step. The economy created an estimated 517,000 new jobs in January, the government said Friday, an increase three times larger than Wall Street expected. The stunningly strong report renewed talk that the Fed might raise its policy interest rate several more times as part of its fight to slay high inflation. A tight labor market has driven up wages over the past two years at the fastest pace in four decades. The jobs report did show a further moderation in wages gains — something the Fed wants to see. The increase in hourly pay over the past year slowed to 4.4% in January from 4.8% in the prior month and a recent peak of 5.9%. “My outlook for inflation is for it to come down,” Daly said. “Right now I see some positive signs, but it’s far too early to declare victory.” The Fed on Wednesday raised its benchmark interest rate, the latest in a string o …