US Manufacturing Contraction Spreads as Slump Stretches into Eighth Month

Thank you, David. I appreciate the opportunity to speak again at the Brookings Institution. It is always an honor for me to return to the place where I held my first job as an aspiring economist. I had the good fortune to be a research assistant for the eminent economist and public servant, including as Vice Chair of the Fed, Alice Rivlin early in my career. It was a formative, if not transformative, experience for me, and I remain grateful to her and Brookings for it. Today, I would like to speak to you about how I see the U.S. economic outlook evolving, specifically through the lens of the dual mandate given to the Federal Reserve by Congress to promote maximum employment and price stability. Then, I will discuss how my assessment of the outlook guides my thinking on monetary policy. I will start by acknowledging that, due to the government shutdown, this is a challenging time to give an economic outlook speech. Federal statistical agencies, including the Bureau of Labor Statistics, the Census Bureau, and the Bureau of Economic Analysis, have not produced many of the data I regularly use in assessing the economy, such as monthly employment data from BLS and the personal consumption expenditures (PCE) price index from BEA. The longer the shutdown lasts, the more data could be disrupted. FED’S COOK SAYS LABOR MARKET REMAINS SOLID BUT IS BEING CLOSELY WATCHED FOR SIGNS OF WEAKNESS; WARNS INFLATION STAYS ELEVATED WITH UPSIDE RISKS. Fed's Cook: Every US Central Bank Meeting Is 'Live' For Monetary Policy, Which Is Not On Preset Path - Recent Fed Interest Rate Cut Was Appropriate Given Job Market Risks - Risks To Both Sides Of Central Bank's Mandate Are Elevated - Current Policy Appropriately Modestly…