(Reuters) - Philadelphia Federal Reserve Bank President Patrick Harker on Thursday expressed support for continuing to hold short-term U.S. borrowing costs in their current range of 4.25%-4.50%, a level he believes will help get inflation back down to the Fed's 2% target but isn't hurting the job market or the economy more generally.  

"The policy rate remains restrictive enough to continue putting downward pressure on inflation over the longer term, as we need it to, while not negatively impacting the rest of the economy," Harker said in remarks prepared for delivery in Newark, Delaware.

The labor market is decelerating but is still creating jobs at a solid pace, he said, and the economy is slowing but is still growing.

Meanwhile recent inflation data shows progress toward the Fed's 2% goal is slowing and still bumpy, he noted, with consumer prices in January unexpectedly rising at the fastest pace in a year and half.

Still, he said in what is a common view among Fed policymakers, "the caution I am taking is to look at all the data and not be moved to act, in either direction, based on one report covering one month." The Fed will get a read on its preferred indicator of inflation on Friday, and economists expect it to show inflation is still elevated but continues to cool.

Harker noted one indicator flashing "yellow" to him - more than one in 10 credit card accounts are being maintained with only minimum monthly payments, a potential precursor of missed payments or delinquencies. But overall, he said, the economy entered this year "in a position of relative health and strength."

"I am of a position that we let monetary policy continue to work," he said. "The data I currently see allows me to provide an economic outlook that is optimistic, despite the ongoing challenge of getting inflation back to target."