Kocherlakota: Fed's done what it can on employment

WASHINGTON (MarketWatch)
Minneapolis Fed President Narayana Kocherlakota said Tuesday that the Federal Reserve is doing about as well as it can in promoting employment, despite the unemployment rate running at 8.3%
Kocherlakota said at the Washington University in St. Louis that there are two types of demand shocks: labor-demand shocks and product-demand shocks
Kocherlakota says monetary policy can offset the impact of the product-demand shocks on employment, but it cannot offset the employment loss due to the fall in labor demand and any associated slow real wage adjustment
There can be fiscal steps, like government subsidies for hiring, to boost labor demand, but they only work if accompanied by monetary easing
As a result, the level of "maximum employment" achievable through monetary policy is less than the "full employment" of labor resources, he says. Kocherlakota, who doesn't vote on interest rate decisions this year, is generally considered one of the more hawkish members on the Fed