- adjusted wages. inflation price increases have cooled notably over the past two and a half years, but, despite this significant progress on disinflation, there is still further to go before reaching our inflation target of 2 percent. annual inflation, as measured by the personal consumption expenditures ( pce ) price index, has eased to 2. 4 percent in november 2024, the latest available reading, from a peak of 7. 2 percent in june 2022. when excluding often volatile food and energy costs, core pce was down to 2. 8 percent in november from 5. 6 percent in september 2022. inflation readings can be volatile month to month, and the path of disinflation has been bumpy and may continue to be. monthly readings earlier in the fall were slightly - 4stronger than expected. however, november ’ s monthly change was lower than expected and consistent with a 2 percent inflation trend. over the past year, core goods prices decelerated, reflecting that supply and demand have come into better alignment. meanwhile, the more modest wage growth i mentioned has contributed to downward pressure on services inflation, outside of housing. rent growth and other measures of housing inflation remain elevated but stepped down in the november report. i expect more progress in reducing housing services inflation this year as the earlier slowing in growth of rents charged to new tenants feeds through into the growth of average rents. i continue to see inflation as gradually — if unevenly — returning over time to our goal of 2 percent in a sustainable manner. labor market turning to the labor market, i see it as solid, though as having cooled over the past year. the u. s. labor market has come into better balance after a period of being very tight, with high turnover, during the initial recovery from the pandemic. the unemployment rate was 4. 2 percent in november. while the latest reading is still below historical averages, it has risen from the multidecade low of 3. 4 percent in april 2023. new applications for unemployment benefits and other measures of layoffs also remain low, but the rate of hiring has slowed to below the pace recorded in the years before the pandemic. the number of open jobs has essentially come back in line with the number of unemployed americans seeking work. the ratio of job vacancies to unemployed workers has fallen to 1. 1 from a peak of 2. 0 in 2022. i will continue to - 5monitor developments in the labor

##oking around michigan today, i see all kinds of changes. some changes are to the production process, like the newest generation of robots. these communicate at lightning speed, using the same high - speed “ 5g ” technology as the latest phones ; utilize artificial intelligence to adapt to their environment ; and operate safely right next to workers on the assembly line. some changes are to design, like collision avoidance systems, sophisticated navigation apps, and the dozens of electric vehicles now on the road or coming to market soon. some observers look at these changes with trepidation. robot orders surged after the onset of the pandemic and have continued apace, a partial solution to the critical shortage of labor in manufacturing. 5 what does all this mean for production line workers? motor vehicle manufacturers have been the most intensive users of robots for decades. the first assembly line robot was rolled out in 1961 by general motors in trenton, new jersey. yet, the motor vehicle industry still employs more than 1 million workers, and its share of manufacturing employment has been going up since 2010. how did that happen? research has shown that workers are not just suited for a single job — they have a bundle of broadly applicable skills. when robots take over one task, workers are shifted to another task and, in turn, new tasks appear. 6 the set of tasks to perform is not fixed, a belief economists call the “ lump of labor fallacy. ” rather, we need production workers to work with the new equipment and to focus on the problem - solving according to the quarterly survey of plant capacity, over 40 percent of manufacturers report difficulty hiring workers, triple the rate before the pandemic. the association for advancing automation reports that as of 2022 : q3, orders were 50 percent higher than two years earlier. see david h. autor ( 2015 ), “ why are there still so many jobs? the history and future of workplace automation, ” journal of economic perspectives, vol. 29 ( summer ), pp. 3 – 30 ; daron acemoglu and pascual restrepo ( 2020 ), “ robots and jobs : evidence from u. s. labor markets, ” journal of political economy, vol. 128 ( june ), pp. 2188 – 244 ; gilbert cette, aurelien devillard, and vincenzo spiezia ( 2021 ), “ the contribution of robots to productivity growth in 30 oecd countries over 1975 – 2019, ” economics letters, vol