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Based on Fed's Harker, it would take "some time" for the labor market to get better. 2.5% inflation can be effective

Patrick T. Harker, President of the Federal Reserve Bank of Philadelphia

Charles Mostoller | Bloomberg | Getty Images

Patrick Harker, president of the US Federal Reserve in Philadelphia, said Friday that it will take a considerable amount of time for US unemployment rates to return to their pre-coronavirus lows.

Harker, a voting member of the Federal Open Market Committee, also said he would find it convenient for inflation to climb up to 3% as long as it happens slowly and manageably.

He joined CNBC's "Squawk Box" to discuss the central bank's new inflation target announced by Chairman Jerome Powell on Thursday.

"Right now you're seeing some signs of recovery, but basically it's moving sideways," Harker said of the US jobs market. "We still have 27 million people who are in some form unemployed and we are not going to fully go back to that kind of employment for a while – we had this great pre-crisis employment picture."

"If you think about it, it took us two years to go from 5% unemployment to 4% unemployment," he added. "It took another year and a half to go from 4% to 3.5% before the crisis."

Harker also said that in August, investors could see a slowdown in consumer spending and retail sales starting in July as the end of the federal government's weekly unemployment benefit of $ 600 per week curbs U.S. household spending.

Cleveland Fed President Loretta Mester told Squawk Box on Friday that she believes more economic support is needed from the central bank as the US recovery from coronavirus will be "slow".

Mester and Harker's comment comes less than a day after Powell announced a major policy change, saying the Fed would allow inflation to run hotter than normal to support the rebound in the labor market and the broader US economy .

The Fed formally agreed to an "average inflation target" policy, which means that after a period of below-average price increases, inflation can remain "moderately" above the 2% target for some time. Inflation has been below the central bank's 2% for most of the time since the financial crisis.

In the twelve months to July, the core PCE price index rose 1.3% after rising 1.1% in June. The core PCE index is the preferred measure of inflation for the Fed's 2% target.

When asked what rate of inflation he would be comfortable with, Harker said that he thought the rate at which inflation rose was more important than the number it rose to.

I would be comfortable with inflation "somewhere north of 2%. But for me, it's not so much the number whether it's 2.5% or 3%," he said. "It's about whether it hits 2%, hits up to 2.5%, or overshoots 2.5%."

"So it's really about the rate of inflation, not just the overall level," added Harker.

Harker said he'd be comfortable with inflation "somewhere north of 2%. But to me, it's not so much the number whether it's 2.5% or 3%."

"It's about whether it hits 2%, hits up to 2.5%, or shoots past 2.5%," he said.

"So it's really about the rate of inflation, not just the overall level," added Harker.

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