to halt economic activity, and so we will be watching these sectors closely to see how this moderation continues. growth in consumer spending has also begun to slow. while that growth was surprisingly strong through most of the second half of 2022, nominal personal consumption expenditures growth slowed to 0. 1 percent in november, and retail sales fell 1 percent. we don't have spending data on goods and services for december, but retail sales fell another 1. 1 percent. while the latest readings of consumer sentiment from the university of michigan moved up some from historic lows, i continue to expect that last year's decline in real incomes, along with higher borrowing costs, will moderate consumer spending this year and help return inflation more promptly to the fomc's 2 percent target. job one is maintaining the progress we are making in lowering inflation, and moderation in consumer spending will support that progress. 1 / 4 bis - central bankers'speeches the slowing in output growth has occurred alongside the continuing strength of the labor market. total nonfarm employment grew 223, 000 in december, close to the average of 237, 000 a month for the fourth quarter. that is down quite a bit from the monthly increase of 539, 000 in the first quarter of 2022 but still a solid growth rate, far above the number of new jobs needed to keep pace with population growth. employment grew robustly in the leisure and health - care sectors, where labor shortages are reportedly severe. while the labor market is strong, it is also tight. the unemployment rate was 3. 5 percent in december, matching the low reached before the pandemic, and the lowest in 53 years. but there are signs that demand for labor is moderating. job openings reported in the november job openings and labor turnover survey and job postings from december's indeed data are down from their recent peaks. temporary - help employment, which has sometimes been a leading indicator for overall employment, has declined in recent months, but that decrease may be due at least in part to employers opting to hire full - time workers in place of temps to help keep jobs filled. a robust labor market, despite modest economic growth, is a plus for workers and allows the fed to focus on lowering inflation. it shows that jobs and income can hold up to the effects of higher interest rates, helping the fomc continue its efforts to lower inflation to our 2 percent goal by further tightening monetary policy. a potential downside of a tight

economic output had flattened, i argued that a soft landing was still possible - that it was quite plausible to make progress on inflation without seriously damaging the labor market. so far, we have managed to do so, and i remain optimistic that this progress can continue. i believe that monetary policy should continue to tighten, but using a comparison i employed in a speech a couple months ago, the view from the cockpit is very different at 30, 000 feet than it is close to the ground. when the fomc began raising the federal funds rate last spring from near zero, it made sense to move quickly. but after frontloading monetary policy tightening, with many unprecedented 75 basis point hikes in the federal funds rate target, by early december i believed the policy stance was 3 / 4 bis - central bankers'speeches slightly restrictive, and i supported a decision by the committee to hike by a still considerable 50 basis points. 2 to return to the airplane image, after climbing steeply and using monetary policy to significantly raise interest rates throughout the economy, it was apparent to me that it was time to slow, but not halt, the rate of ascent. and in keeping with this logic and based on the data in hand at this moment, there appears to be little turbulence ahead, so i currently favor a 25 - basis point increase at the fomc's next meeting at the end of this month. beyond that, we still have a considerable way to go toward our 2 percent inflation goal, and i expect to support continued tightening of monetary policy. i think that is probably enough from me, so that there will be more time for you to ask questions. thank you again to the cfr for the opportunity to be here today. 1 the fomc communicated its intentions for some time before march, and this guidance effectively began monetary policy tightening before raising rates and beginning the tapering of asset purchases that month. the views expressed here are my own and to not necessarily reflect those of my colleagues on the fomc. 2 each 75 basis point hike was the largest rate single increase since the fomc began announcing its rate decisions in 1994. the committee raised rates at individual meetings by larger amounts in the early 1980s, when it raised the federal funds rate to near 20 percent. 4 / 4 bis - central bankers'speeches