bank failures and stress among some other mid - size banks. let me talk about each of these three key issues and then conclude with how i see these factors playing into my june policy decision. a very tight labor market the employment report for april showed solid job growth, but previous months were revised downward by a significant amount. the unemployment rate fell slightly to 3. 4 percent, reaching its low in recent years, which is the lowest since 1969. the labor force participation rate held steady in april after several months of increases. average hourly earnings rose at their fastest pace this year, and, over the past 12 months, were up 4. 4 percent, slightly higher than the yearly pace in march. these data suggest the labor market is still powering forward. 1 / 5 bis - central bankers'speeches however, there are some other signs that the labor market may be cooling. temporaryhelp employment fell for the third straight month and is considerably down from last year. some see this category as a leading indicator for overall employment, meaning we may see some softening in labor demand going forward. furthermore, job vacancies declined by 384, 000 in march, and the number of job vacancies for every person counted as looking for a job has declined to 1. 6, down from the peak of 2 for every job seeker. this reduction is consistent with a softening in labor demand, but it is still far above the 1 - to 1 ratio that was typical before the pandemic. finally, the rate at which people are quitting jobs, a sign of confidence in the job market, has fallen and is in hailing distance of the level that persisted for the couple of years before the pandemic recession. as i have argued in other speeches, a loosening labor market, to help our fight against inflation, doesn't have to mean a recession or big job losses. 2 but we do need to see more loosening than we have seen to help take the heat off the inflation rate. inflation is stubbornly high let's talk about where we are on inflation. the latest consumer price index ( cpi ) report showed that headline inflation fell from 5 percent year over year in march to 4. 9 percent in april. but that decline was only due to rounding - the actual decrease was just five onehundreds of a percentage point, from 4. 98 percent to 4. 93 percent. almost no progress. the news on core inflation was similar. core cpi

. from this viewpoint, the policy rate is high enough and we simply need to hold it there to bring inflation down toward our 2 percent target. i do not expect the data coming in over the next couple of months will make it clear that we have reached the terminal rate. and i do not support stopping rate hikes unless we get clear evidence that inflation is moving down towards our 2 percent objective. but whether we should hike or skip at the june meeting will depend on how the data come in over the next three weeks. we will get additional labor market data, with some information about wages, and additional inflation numbers in the next few weeks that will continue to shape my view on where we stand relative to the fomc's dual mandate. during this time, i'll also be reviewing data on credit conditions to evaluate how much potential tightening is coming from the banking sector. fighting inflation continues to be my priority. we worked very hard over the past year to quickly raise the target range for the federal funds rate from near zero to about 5 percent. while we are seeing some tentative signs of cooling in the labor market, i am determined to continue to use our policy tools as needed to appropriately bring inflation down to 2 percent. 4 / 5 bis - central bankers'speeches thank you. 1 the views expressed here are my own and are not necessarily those of my colleagues on the federal open market committee. 2 see christopher j. waller ( 2022 ), " responding to high inflation, with some thoughts on a soft landing, " speech delivered at the institute for monetary and financial stability distinguished lecture, goethe university, frankfurt, germany, may 30. 3 see kevin l. kliesen ( 2023 ), " measures of'trend'inflation, " federal reserve bank of st. louis, economic synopses, april 18. 4 of course, i want to see wages grow. but wage growth needs to be at levels that are consistent with our two percent inflation goal. otherwise, wage gains will be outstripped by inflation and families effectively will have less take home pay. 5 / 5 bis - central bankers'speeches