ORLANDO, Fla. (Reuters) - U.S. job gains in October were "solid," and showed continued stable progress towards the Federal Reserve's monetary policy goals, Atlanta Fed president Dennis Lockhart said on Friday as the central bank progresses towards a possible rate increase in December.
Lockhart did not speak to the likelihood of a December move, though he was due to take questions at a National Association of Realtors conference and speak to reporters later in the day. Two other policymakers speak on Friday, including Vice Chair Stanley Fischer.
In the Labor Department's closely watched non-farm payrolls report issued on Friday, the addition of 161,000 jobs in October was slightly below expectations but well above what the Fed feels is needed to continue moving the economy toward full employment. The unemployment rate fell from 5 percent to 4.9 percent.
Lockhart called it a "satisfactory report", saying: "Job gains remain on a stable course."
In prepared remarks, Lockhart said rate increases over the next two years will be "very" gradual, with the economy on track for moderate growth of around two percent.
"I anticipate a very gradually rising interest rate environment over the next two years... I do not see rates marching higher for an extended period in a preprogrammed tightening campaign. The economy does not call for that, at least not at this time," Lockhart said.
Because the Fed estimates that the neutral rate of interest for the country has fallen, he said people in the housing and real estate industries should not regard the current tightening cycle as "ominous."
The federal funds rate and other interest rates are all likely to remain below historical averages, while the housing industry in general should benefit as millennials come off the sidelines and begin buying homes, he said. Any Fed rate increases, he said, would be premised on continued economic growth, low unemployment, and likely wage gains - all supportive of homebuying.
"When the rate environment does reach a steady state, mortgage rates should still be low and affordable by historical standards," he said.
(Reporting by Howard Schneider; Editing by Chizu Nomiyama)