Fed's Lacker: Healing in labor market sufficient, rate hike should follow

Richmond Fed President Jeffrey Lacker, who had been in favor of a rate hike in June and will have a vote at the Fed's September 16-17 policy meeting, said the U.S. economy no longer needs interest rates near zero. His comments came minutes before the U.S. Labor Department released its report.

"It's time to align our monetary policy with the significant progress we have made," Lacker said in prepared remarks "The Case Against Further Delay."

His remarks minutes before the Labor Department was due to release its monthly employment report for August, which was expected to show robust job growth.

Several Fed officials have said the report would be critical for the decision over if to raise rates in September.

However, Lacker said the healing in the labor market necessary for a liftoff have already been fulfilled, even if the jobs report disappointed.

"It's quite unlikely that a one-month blip would materially alter the labor market picture or, for that matter, the monetary policy outlook," he said.

The strongest evidence in favor of higher rates was that consumer spending had picked up substantially, he noted. This was probably the result of stronger earnings by families and expectations the economy would continue to improve.