The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $78.8 billion in July, up $5.8 billion from $73.0 billion ...

post: BOSTIC: FED IS IN A GENERALLY FAVORABLE POSITION BOSTIC: FED MUST STAY VIGILANT TO ENSURE INFLATION RISKS CONTINUE TO WANE BOSTIC: SOFT LANDING FOR ECONOMY MAY BE WITHIN REACH BOSTIC: WE MUST NOT MAINTAIN A RESTRICTIVE POLICY STANCE FOR TOO LONG post: FED'S BOSTIC: PRICE PRESSURES ARE DIMINISHING QUICKLY AND BROADLY. post: FED'S BOSTIC: I AM NOT QUITE PREPARED TO DECLARE VICTORY OVER INFLATION AS RISKS REMAIN. post: FED'S BOSTIC: I AM NOW GIVING EQUAL ATTENTION TO MAXIMUM EMPLOYMENT OBJECTIVE AS INFLATION.Bostic: Shifting Focus to Both Sides of the Dual Mandate I am writing this a few weeks before the Federal Open Market Committee's highly anticipated September 17 and 18 meeting. Of course, I cannot and will not predict what action the Committee might take. But I will outline the evolving economic and monetary policy environment as I see it. And I would like to home in on one particularly timely dynamic: the balancing of my risk outlook as it pertains to the Committee's dual mandate of price stability and maximum employment. I have focused mainly on the price stability side of the mandate since inflation spiked in 2021, as we were clearly further from that goal than from the goal for maximum employment. But as the labor market has cooled in recent months, the balance of risks has shifted, and I am today giving basically equal attention to the maximum employment objective. The labor market continues to weaken, but it is not weak. The unemployment rate has ticked up this year, yet at 4.3 percent is just a smidge above the Committee's long-run projection of 4.2 percent. Monthly job creation paints a similar picture. The 12-month moving average was a still-healthy 209,000 new jobs a month through July 2024. But that number has steadily declined from a 12-month average of 264,000 in July 2023. (I will note that the Bureau of Labor Statistic has signaled that these growth numbers are likely to be revised downward in the next benchmark revision, in February 2025.) Another key metric, the number of hires as a percentage of employment, or the hires rate, has retreated to roughly the prepandemic trend. And job openings across the economy remain above levels that prevailed before 2020, but are down substantially from the peaks of 2022. Given those data, it is not surprising that the once-yawning gap between high labor demand (employed people plus job openings) and lower labor supply (employed plus the unemployed) has gradually narrowed to under 1.5 million in June from more than 5