frequency readings, has moved down since april, although it came in at 2. 6 percent in july, again remaining well above our 2 percent goal. in addition, the latest consumer and producer price index reports suggest that 12 - month core pce inflation in august was likely a touch above the july reading. the persistently high core inflation largely reflects pressures on housing prices, perhaps due in part to low inventories of affordable 1 / 5 bis - central bankers'speeches housing. the progress in lowering inflation since april is a welcome development, but core inflation is still uncomfortably above the committee's 2 percent goal. prices remain much higher than before the pandemic, which continues to weigh on consumer sentiment. higher prices have an outsized effect on lower - and moderateincome households, as these households devote a significantly larger share of income to food, energy, and housing. prices for these spending categories have far outpaced overall inflation over the past few years. economic growth moderated earlier this year after coming in stronger last year. private domestic final purchases ( pdfp ) growth has been solid and slowed much less than gross domestic product ( gdp ), as the slowdown in gdp growth was partly driven by volatile categories including net exports, suggesting that underlying economic growth was stronger than gdp indicated. pdfp has continued to increase at a solid pace so far in the third quarter, despite some further weakening in housing activity, as retail sales have shown further robust gains in july and august. although personal consumption has remained resilient, consumers appear to be pulling back on discretionary items and expenses, as evidenced in part by a decline in restaurant spending since late last year. low - and moderate - income consumers no longer have extra savings to support this type of spending, and we have seen loan delinquency rates normalize from historically low levels during the pandemic. the most recent labor market report shows that payroll employment gains have slowed appreciably to a pace moderately above 100, 000 per month over the three months ending in august. the unemployment rate edged down to 4. 2 percent in august from 4. 3 percent in july. while unemployment is notably higher than a year ago, it is still at a historically low level and below my and the congressional budget office's estimates of full employment. the labor market has loosened from the extremely tight conditions of the past few years. the ratio of job vacancies to unemployed workers has declined further to a touch below the historically elevated

alan greenspan : economic flexibility remarks by mr alan greenspan, chairman of the board of governors of the us federal reserve system, before the national italian american foundation, washington dc, 12 october 2005. * * * it is a pleasure once again to speak before the national italian american foundation. i have long since been awarded the status of honorary italian, for which i am sincerely appreciative. in my more than eighteen years at the federal reserve, much has surprised me, but nothing more than the remarkable ability of our economy to absorb and recover from the shocks of stock market crashes, credit crunches, terrorism, and hurricanes - - blows that would have almost certainly precipitated deep recessions in decades past. this resilience, not evident except in retrospect, owes to a remarkable increase in economic flexibility, partly the consequence of deliberate economic policy and partly the consequence of innovations in information technology. a couple of weeks ago, i outlined to a convention of fellow economists how i believe this all came about. i should like to share some of those views with you this morning. for this country's first century and a half, government was only peripherally engaged in what we currently term the management of aggregate demand. any endeavor to alter the path of private economic activity through active intervention would have been deemed inappropriate and, more important, unnecessary. in one of the more notable coincidences of history, our declaration of independence was signed the same year in which adam smith published his wealth of nations. smith's prescription of letting markets prevail with minimal governmental interference became the guiding philosophy of american leadership for much of our history. with a masterful insight into the workings of the free - market institutions that were then emerging, smith postulated an " invisible hand " in which competitive behavior drove an economy's resources toward their fullest and most efficient use. economic growth and prosperity, he argued, would emerge if governments stood aside and allowed markets to work. indeed, within a very few decades, free - market capitalism became the prevailing stance of most governments'economic policy, even if it was often implemented imperfectly. this framework withstood the conceptual onslaughts of robert owen's utopians, karl marx's communists and later, the fabian socialists. the free - market paradigm came under more - vigorous attack after the collapse of the world's major economies in the 1930s. as the global depression deepened, the seeming failure of competitive markets to restore full employment perplex