WASHINGTON: Federal Reserve policymakers showed increasing divisions in their last meeting over how much the US jobs market has improved, a key factor in deciding how soon they should tighten policy.

While the participants of the July 29-30 Federal Open Market Committee remained nearly unanimous in their support for the existing Fed policy course, the minutes of the meeting, released Wednesday, showed an intensifying debate over plans for raising interest rates late next year.

The record showed the discussion increasingly focused on how much the labor market has tightened and how that would impact inflation, which has remained modest so far.

So-called inflation hawks outside the Fed, and a small number inside the central bank, have been calling for an accelerated schedule to increase the benchmark Fed funds rate, which has been held near zero for nearly six years. The minutes suggested that there were more hawkish views on the FOMC than just the known dissent of Charles Plosser, the head of the Fed’s Philadelphia branch.

They showed that several FOMC members felt the sharp fall in the unemployment rate to 6.2 percent from 7.3 percent a year ago, was a good indicator of the tightening situation.

But others said the high numbers of long-term unemployed and part-time workers represented continued slack, or weakness in the market, that could not be seen in the jobless rate.

Despite the jobless rate having fallen quickly, “many participants continued to see a larger gap between current labor market conditions and those consistent with their assessments of normal levels of labor utilization,” the minutes said.—AFP