ROSSLYN, Va. (Reuters) - The unexpectedly strong January jobs report and retail sales may have been influenced by seasonal factors, and don't necessarily point to overly strong demand that would raise concerns about efforts to control inflation, Richmond Federal Reserve president Thomas Barkin said on Friday.
"I am not taking as much signal from the data that we've gotten recently on the demand side as you might if you start to see it for multiple months," Barkin said.
He noted for example that the more than half-million payroll jobs added in January was partly the result of seasonal adjustments and the fact that companies apparently laid off fewer Christmas-season hires than would usually be the case -- what Barkin called a logical response to a tight labor market.
For now, he said, none of that put at risk what he felt is continued, slow progress on inflation.
The Fed will still need to raise interest rates, he said, but could stick with slower, quarter-point increases and decide on a higher or lower stopping point as the path of inflation becomes clearer.
On inflation, "what you see is progress, but slow progress, you don't see victory," Barkin said in comments to reporters after an appearance at the Rosslyn Business Improvement District.
"I like the 25 basis point path because I believe it gives us the flexibility to respond to the economy," said Barkin, who this is year is not a voting member of the Fed's rate-setting Federal Open Market Committee.
The Fed at its last meeting raised the target federal funds rate by a quarter point, to a range between 4.5% and 4.75%, after a year of larger half point and three quarter point rate hikes. The bulk of Fed officials as of December saw rates moving to a peak of between 5% and 5.25% this year, a projection that will be updated at the Fed's upcoming March 21-22 meeting.
"Moving inflation back to target will require more rate increases," Barkin said. "How many of those I think we'll have to see."