Press conference exchange between MARIA ELOISA CAPURRO and Fed Chair Jerome Powell:

user: Afternoon, Chair Powell. Maria Eloisa Capurro from Bloomberg News. You mentioned a slowdown in consumer spending, and I wanted to see if you could “walk us through” what was the discussion with the Committee around that. We’ve seen delinquency rates rising for upper-income households. How do you see that evolving in the next few months, and how much of a vulnerability that is for the economy going forward?

assistant: Consumer spending had been very, very strong for the last couple of years and had—repeatedly, forecasters, not just us, had been forecasting it would slow down. And now maybe it finally has. So I would say, you know, if you talk to credit card companies, for example, they will tell you that the consumer is in solid shape and that spending is at a healthy level. It’s not growing rapidly, but it’s at a healthy level. And delinquencies are not, not a problem. You mentioned high-end delinquencies. I don’t know what to make of that. I read the same thing. But—so, generally—and if you look at the banks and when the banks talk about in their earnings calls, their—the performance of credit has been good. So, essentially, you, you have a consumer that’s in good shape and is spending, not at a rapid rate. But it, it, it’s true. And it was, again, right in line with what we expected, the GDP data that we got this week. So—and I think it’s still a little bit difficult to interpret, because you have these massive swings in net exports, which, which may also be affecting—you know, some of that can be affected by—can affect consumer spending as well. Look, we—it’s one of the data points that we pay most careful attention to, and there’s no question that it’s slowed. And, you know, we’re watching it closely. But we also watch the labor market and the performance of inflation. Those are our two—those are our two variables that we’re assigned to maximize.

user: And just to follow up on what my colleagues were asking about the dissents: Governor Waller said that the labor market is on edge, and he was pointing to weaknesses on the private sector. I was wondering, you’ve said that the main number to look at is the unemployment number overall, but what was the discussion about the state of the private jobs market?

assistant: So I’m not going to talk about any individual’s—you know, any individual’s comments. I wouldn’t do that. But, look, I think what we know is that private- sector job creation, you know, certainly in the last report—we’ll see on Friday—but had come down a bit. And, and if you—if you take the QCEW adjustment seriously, with it—it may be even low—maybe close to zero. But the unemployment rate is still—was still low. So, what that’s telling you is that, that, you know, demand for workers is slowing, but so is the supply. So that’s a—it’s in balance, oddly enough. You’ve got a very low unemployment rate, and it’s been there for a year as job creation has moved down, but also we know that, you know, because of immigration policy really, the flow into our labor forces is just a great deal slower. And those two things have slowed more or less in tandem. If you look at things, like I mentioned, quits, look at wages—wages are gradually cooling—look at vacancies to unemployment, those things have been pretty stable for—they haven’t really moved a lot in a full year. So I think if you take the totality of the labor market data, you’ve got a solid labor market. But I think you have to see that there are downside risks. It’s not—you don’t see weakening in the labor market, but I think you’ve got downside risks in a world where unemployment’s being held down because both demand and supply are declining. I think that’s—it’s worth paying close attention to it, and we are.