Fed's Evans: Stagnant Wages Should Mean No Rate Hike Until 2016

(RTTNews) - Chicago Federal Reserve President Charles Evans on Friday said the central bank should be patient on raising interest rates due to concerns about low inflation and declining U.S. wages.

Despite overall improvements in the labor market, Evans would not start raising rates from zero before 2016, he said in a televised interview on CNBC.

Markets currently expect the first interest rate hike by mid-2015.

December's jobs report showed stronger-than-expected nonfarm job growth of 252,000. The unemployment rate dropped by a slightly greater-than-forecast to 5.6 percent.

However, average hourly employee earnings fell by $0.05 to $24.57 in December.

The annual rate of average hourly earnings growth subsequently slowed to 1.7 percent, the slowest rate of growth since October of 2012.

"We have to be paying attention to inflation," Evans said. "If we are going to get inflation up to our 2 percent objective, we are going to have to see wages increase."