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

we could have seen an unwarranted decline in longer - term interest rates and broader financial conditions could become overly accommodative. this outcome could work against the committee's goal of returning inflation to our 2 percent target. i am pleased that chair powell directly addressed both of these concerns during the press conference following last week's fomc meeting. third, there continues to be a considerable amount of pent - up demand and cash on the sidelines ready to be deployed as the path of interest rates moves down. bringing the policy rate down too quickly carries the risk of unleashing that pent - up demand. a more measured approach would also avoid unnecessarily stoking demand and potentially reigniting inflationary pressures. finally, in dialing back our restrictive stance of policy, we also need to be mindful of what the end point is likely to be. my estimate of the neutral rate is much higher than it was before the pandemic. therefore, i think we are much closer to neutral than would have been the case under pre - pandemic conditions, and i did not see the peak stance of policy as restrictive to the same extent that my colleagues may have. with a higher estimate of neutral, for any given pace of rate reductions, we would arrive at our destination sooner. ongoing risks to the outlook turning to the risks to achieving our dual mandate, i continue to see greater risks to price stability, especially while the labor market continues to be near estimates of full employment. although the labor market data have been showing signs of cooling in 3 / 5 bis - central bankers'speeches recent months, still - elevated wage growth, solid consumer spending, and resilient gdp growth are not consistent with a material economic weakening or fragility. my contacts also continue to mention that they are not planning layoffs and continue to have difficulty hiring. therefore, i am taking less signal from the recent labor market data until there are clear trends indicating that both spending growth and the labor market have materially weakened. i suspect the recent immigration flows have and will continue to affect labor markets in ways that we do not yet fully understand and cannot yet accurately measure. in light of the dissonance created by conflicting economic signals, measurement challenges, and data revisions, i remain cautious about taking signal from only a limited set of real - time data releases. in my view, the upside risks to inflation remain prominent. global supply chains continue to be susceptible to