(RTTNews) - The Federal Reserve Bank of Chicago President Austan Goolsbee said on Monday that recent weaker than expected job numbers and other data do not suggest that the U.S. economy is in a recession yet and added that the policy need not be restrictive if the economy is not overheating.
"Jobs numbers came in weaker than expected, but not looking yet like recession," Goolsbee said to the broadcaster CNBC.
"I do think you want to be forward-looking of where the economy is headed for making the decisions."
The Labor Department report on Friday showed that employment in the U.S. increased by much less than expected in the month of July.
Non-farm payroll employment climbed by 114,000 jobs in July, which was much weaker than the expected increase of 175,000 jobs.
Last week, the Fed decided to maintain the target range for the federal funds rate at 5.25 to 5.50 percent and acknowledged "some further progress" toward its inflation objective.
Investors widely expected the Fed to begin lowering interest rates from September. Goolsbee suggested that interest rates are currently "restrictive".
"But if we are not overheating, we should not be tightening or restrictive in real terms," the policymaker said.
"The Fed's job is very straightforward: maximize employment, stabilize prices and maintain financial stability. That's what we're going to do," Goolsbee said. "So if the conditions collectively start coming in like that on the through line, there's deterioration on any of those parts, we're going to fix it."
Goolsbee's comments came in a day that saw a global market sell-off led by Japan's Nikkei. The Nikkei 225 Index recorded its biggest slump since "Black Monday" in October 1987.
Concerns about the U.S. economy slipping into recession following last Friday's disappointing jobs report triggered the significant weakness in the overseas markets.
The Bank of Japan's decision to raise interest rates last week and the tensions in the Middle East also contributed to the weaker market sentiment.
