By Jonnelle Marte
(Reuters) -The U.S. labor market is likely to recover at a pace of about 500,000 jobs a month, putting it on track to return to pre-pandemic levels by next summer, St. Louis Federal Reserve President James Bullard said on Wednesday.
"It's not that easy to add, you know, 1 million jobs in a particular month," Bullard said during an online interview with the Washington Post.
Returning to pre-pandemic employment levels by next summer could help meet the Fed's criteria for raising interest rates, Bullard said. He repeated his view that he supports tapering asset purchases early so the Fed could raise interest rates next year, if needed.
"So you'd be sitting here next summer, with inflation well above target and jobs on the way back to pre-pandemic levels," Bullard said. "That sounds to me like that's something we should be prepared for."
The Fed official said he expects the inflationary shock caused by the pandemic to be temporary but still more persistent than others anticipate. Inflation is currently at 3.5% annually, based on the Fed's preferred measure, Bullard said. He expects inflation could range between 2.5% and 3% in 2022 before gradually coming down to 2%.
"It is going to come down, but not as fast as what many people have in mind," he said.
Asked how he thought the Delta variant of the virus could affect the economy, Bullard said he thinks U.S. consumers have adjusted to working and consuming during the pandemic. He pointed to last winter, when virus cases surged but economic growth remained positive.
"There's been a lot of adaptation so far, and it's led to pretty good macroeconomic outcomes despite the pandemic," Bullard said.