productivity and short - run growth, once we have made those changes, they're done, so i don't see this as a driver of sustained productivity growth. i have also heard the argument that when labor turnover was very high during the pandemic, new hires were 3 / 5 bis - central bankers'speeches being trained, and by the time they were ready to start contributing to production, they would leave for a new job and start a new training process. now that the pace of turnover is back down to normal levels, firms are reaping the benefits of keeping newly trained workers who then move up the learning curve at the firm. again, while i see this raising the level of productivity in the short run, it may simply be returning productivity to previous levels. i will be watching how productivity evolves in the near term. i will keep my fingers crossed for more good news, but i am not convinced that the recent boom in productivity growth will continue. therefore, i will keep that in mind as i form my judgments about the economic outlook and appropriate setting of monetary policy. now let's talk about inflation. we made a lot of headway in reducing inflation in the past year or so, although the readings in the past two months have been disappointing. both total cpi inflation and core inflation that excludes energy and food rounded to a 0. 4 percent increase for the month of february, which is obviously not progress toward our inflation goal. while housing services prices, which rose in january, moderated a bit, core goods prices, which had been falling recently, rose due to elevated import price increases. in trying to judge what the underlying trend is for inflation, i tend to look at annualized core measures over 3 or 6 months. for most of a year, i watched these numbers come down more quickly than 12 - month readings, telling me that we were making substantial progress. but, more recently, the 3 - month core cpi, which was running at a 3. 3 percent rate in december, rose to 4. 2 percent in february. six - month core cpi, which was also 3. 3 percent in december, was up to 3. 9 percent last month. these shorter - term inflation measures are now telling me that progress has slowed and may have stalled. but we will need more data to know that. the fomc uses personal consumption expenditure inflation data to measure progress toward our 2 percent goal, and we won't get those results for

shortages appear to be only slowly working themselves out. in contrast, the manufacturing capacity taken offline by the harsh weather in texas in february is coming back online rapidly. if past experience is any guide, production will rise to meet the level of goods demand before too long. the supply – demand imbalances in the in - person services sector are expected to be resolved within a few quarters with progress on virus control and the return of in - person schooling. and demand growth itself is expected to moderate after a reopening surge, broadly coinciding with the time when some of the current tailwinds from fiscal support and makeup consumption turn to headwinds. of course, there may be additional demand and supply surprises that could further complicate the inflation picture. to the extent that supply chain congestion and other reopening frictions are transitory, they are unlikely to generate persistently higher inflation on their own. a persistent material increase in inflation would require not just that wages or prices increase for a period after reopening, but also a broad expectation that they will continue to increase at a persistently higher pace. a limited period of pandemic - related price increases is unlikely to durably change inflation dynamics. past experience suggests many businesses are likely to compress margins and to rely on automation to reduce costs rather than fully passing on price increases. 12 in the december duke cfo survey, roughly one - half of chief financial officers from large firms and about one - third of those from small firms reported “ using, or planning to use, automation or technology to reduce regarding compression of margins and pass - through of wage increases to prices, see ekaterina v. peneva and jeremy b. rudd ( 2017 ), “ the passthrough of labor costs to price inflation, ” journal of money, credit and banking, vol. 49 ( december ), pp. 1777 – 802 ; and the subsequent analysis in ekaterina peneva ( 2019 ), “ it ’ s all about the labor market, ” presentation delivered at the brookings institution, washington, october 3, https : / / www. brookings. edu / wp - content / uploads / 2019 / 09 / ekaterina - peneva. pdf. - 8reliance on labor. ” 13 the pandemic - induced shift to virtual, or contactless, versions of many previously in - person interactions is likely to lead to some durable shifts in the use of technology