i am not ready to take that step. fortunately, the strength of the u. s. economy and resilience of the labor market mean the risk of waiting a little longer to ease policy is small and significantly lower than acting too soon and possibly squandering our progress on inflation. turning to the performance of the u. s. economy, the atlanta fed's gdpnow model, based on all current data, predicts first quarter growth in real gdp of 2. 1 percent at an annual rate. similarly, the consensus from the blue chip survey of private sector forecasters is 2 percent. this would be a significant slowdown from the average of around 4 percent in the second half of 2024 but still quite solid growth. 1 / 5 bis - central bankers'speeches consumer spending, the largest component of gdp, seems to be moderating this quarter. retail sales fell significantly in january and then retraced about half of that decline in february. smoothing out these swings, they clearly indicate a moderation in goods spending from the second half of last year. however, services spending, excluding energy, grew moderately in january, which offset to some extent the decline in goods spending. i will be watching on friday morning to see what the february data on personal income and spending show. on the business side, surveys of purchasing managers in february continued to report results we have been hearing for over a year. for manufacturers, the institute for supply management indicated a slight contraction in activity, with new orders and production moving down a bit. this contrasts with nonmanufacturing businesses that continued to see an expansion in activity, with measures of new orders and business activity on the higher end of their readings over the past year. now let me turn to the labor market. the data is sending a mixed message on how supply and demand are evolving. as i noted earlier, payroll data estimate that employers added 275, 000 jobs in february. this robust gain is not only above the 265, 000 average level of job creation since november, but also above the 251, 000 monthly average for all of 2023. recent gains have been broad based across most sectors, rather than concentrated in a few sectors, which may be a sign that demand is not moderating as much as is needed to support continued progress on inflation. conversely, the household survey estimated that the unemployment rate rose to 3. 9 percent in february. but that increase was driven mostly by an outsized rise in the number of 16 -

christopher j waller : there's still no rush speech by mr christopher j waller, member of the board of governors of the federal reserve system, at the economic club of new york, new york city, 27 march 2024. * * * thank you, barbara, and thank you for the opportunity to speak to you today. 1 my subject, as it often is, is the outlook for the u. s. economy, and how that affects the federal open market committee's ( fomc ) continuing effort to reduce inflation to a sustained level of 2 percent while maintaining a healthy labor market. we made a lot of headway toward our inflation goal in 2023, and the labor market moved substantially into better balance, all while holding the unemployment rate below 4 percent for nearly two years. but the data we have received so far this year has made me uncertain about the speed of continued progress. back in february, i noted that data on fourth quarter gross domestic product ( gdp ) as well as january data on job growth and inflation came in hotter than expected. i concluded then that we needed time to verify that the progress on inflation we saw in the second half of 2023 would continue, which meant there was no rush to begin cutting interest rates to normalize the stance of monetary policy. over the past month, additional economic data has reinforced this view. february job gains moved back up to 275, 000, making the three - month average a strong 265, 000, and various inflation measures have continued to come in hot. core personal consumption expenditures ( pce ) inflation jumped to 0. 4 percent on a monthly basis in january, after averaging around 0. 1 percent in october through december last year. and with february consumer price index ( cpi ) and producer price index inflation data in hand, some forecasts are predicting core pce inflation may be revised up for january and is expected to come in at 0. 3 percent for february, which we will learn about on friday. adding this new data to what we saw earlier in the year reinforces my view that there is no rush to cut the policy rate. indeed, it tells me that it is prudent to hold this rate at its current restrictive stance perhaps for longer than previously thought to help keep inflation on a sustainable trajectory toward 2 percent. i continue to believe that further progress will make it appropriate for the fomc to begin reducing the target range for the federal funds rate this year. but until that progress materializes,