US jobs market not "excessively tight", Fed's Powell says

The lack of a faster pick-up in wages appears to be indicating that the US jobs market is not "excessively tight", the new head of the US central bank said, arguing for a gradual pace of interest rate hikes.

In remarks prepared for a speech at The Economic Club of Chicago, Illinois, Jerome Powell said salary growth had remained "moderate", with weak productivity growth an important reason behind that.

"At the same time, the absence of a sharper acceleration in wages suggests that the labor market is not excessively tight. I will be looking for an additional pickup in wage growth as the labor market strengthens further," he added.

Nevertheless, he also indicated that many measures of labour utilisation suggested the labour market was near so-called 'full employment' - although such assessments were surrounded by uncertainty.

He did not address global trade in his speech, but in response to a question from an attendee, he reportedly said that "a number of business leaders from around the country" had said that changes to trade policy had become a bit of a risk.

Investors also picked-up on his belief that it was the combination of the advent of the Internet, together with that of global supply chains, that was bearing down on inflation.

"Over the next few years, we will continue to aim for 2 percent inflation and for a sustained economic expansion with a strong labor market.

"As I mentioned, my FOMC colleagues and I believe that, as long as the economy continues broadly on its current path, further gradual increases in the federal funds rate will best promote these goals."