Japan: Business activity growth strengthens in November, but cost pressures intensify

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FED PAULSON: SHE IS APPROACHING DECEMBER RATE DECISION CAUTIOUSLY ... FED’S PAULSON SAYS MONETARY POLICY MUST WALK A FINE LINE GIVEN UPSIDE INFLATION RISKS AND DOWNSIDE EMPLOYMENT RISKS; SAYS SHE REMAINS MORE WORRIED ABOUT THE LABOR MARKET THAN INFLATION AT THE MARGIN ... FED’S PAULSON SAYS ECONOMIC BIFURCATION MAY HAVE INTENSIFIED WITH LOWER- AND MODERATE-INCOME HOUSEHOLDS STRUGGLING; ADDS THAT THE SEPTEMBER LABOR MARKET REPORT WAS ‘ENCOURAGING’ OVERALL FED’S PAULSON SAYS TARIFF EFFECTS HAVE BEEN SMALLER THAN FEARED AND OVERALL DEMAND IS HELPING CONTAIN INFLATION; SAYS GROWTH IS MORE DEPENDENT THAN USUAL ON HIGH-INCOME EARNERS AND THE OUTLOOK IS PARTICULARLY SENSITIVE TO EQUITY VALUATIONS Economic Outlook Good evening, and thank you, Joe.1 I’m thrilled to be here for my very first Field Meeting Capstone. I’ve had the pleasure of meeting some of you during my visits across the District this fall, and it’s wonderful to see some familiar faces again. For those I haven’t met yet — welcome! I’m looking forward to getting to know you in the months ahead. This year marks a special milestone. It’s the 80th anniversary of the Field Meeting series. Since I am new to the Philly Fed, I’ve been asking a lot of questions about things that other people take for granted. When I first saw the name “field meeting,” I didn’t get the connection with banking, so I did some digging. And our 1946 annual report provides a clue to the origins of these meetings. It describes the development of “a program of conferences with bankers in the field.”2