Federal Reserve Bank of San Francisco

The latest edition of Fedviews is now available, authored by Sylvain Leduc: The economy appears to be approaching a soft-landing. Headline PCE inflation declined from 7.2% in June 2023 to 2.2% in August 2024, just above the Fed’s 2% longer-run goal. Unemployment rose modestly to 4.1% over that period, a level that remains low by historical standards. Prime-age labor force participation improved notably over the past three years, helping to boost production and ease inflationary pressures. Gains in the participation rate of prime age women, which is at a historical high, have been important to the recovery. Labor productivity has been growing at an annualized pace of about 2.5% over the past year, near the rate of the 1995-2005 period when major advances in information and communications technologies occurred. AI advances have the potential to further boost productivity growth. The core goods sector has experienced deflation in recent quarters, while core services inflation remains about 1.5 percentage points above its pre-pandemic level. Further declines in core services inflation are needed for headline PCE inflation to reach the Fed’s 2% goal. For more insights into the current state of the economy and monetary policy, check out the latest from Fedviews: https://sffed.us/40ntvl9

We're live now--join us for this insightful conversation on AI and worker productivity!

Join us for a live discussion on #generativeAI and worker productivity with Michael Schwarz, chief economist at Microsoft, and Sylvain Leduc, our Director of Economic Research. RSVP for the livestream ⏬

I want us to be open minded as we continue to steady a strong economy. We can have a strong labor market, we can have strong GDP growth, and we can have inflation stay low. As I said this week during my conversation at the Wall Street Journal Tech Live, the impartial judge in all of this will be inflation. If inflation goes up, we’ve got a different issue. If inflation continues to go down, then we have to be open-minded moving forward. Our economic expansion right now is relatively young when you compare it to previous expansions like the one before the pandemic or even going back to the 1990s. We have a young expansion, and we just need to create the conditions where it can continue to be sustained. https://lnkd.in/g3P5Temh

Join me this Friday for a discussion on Gen AI and its potential to raise productivity. I will be talking with Michael Schwarz, Microsoft’s chief economist, about his team’s research on workplaces across the world. You can register here: GenAI and Real-World Productivity

We’ve updated our prior research on inflation and labor market slack. New data reaffirm that a relatively modest increase in the amount of labor market slack can coincide with a sizable decline in inflation, supporting the potential for a soft landing. https://sffed.us/3BPp3Bp

Read about economic conditions in Reserve Bank Districts in the Beige Book: https://lnkd.in/d3ARB_z4 The 12 Reserve Banks represent different geographic regions, or districts, and provide a wealth of information on conditions across the nation. Learn more about the Reserve Banks’ role as a key entity of the Federal Reserve System: https://lnkd.in/dtUK-58U   https://lnkd.in/dvmhUrhu

#SmallBusinessOwners, consider participating in the Small Business Credit Survey (SBCS). The SBCS captures and amplifies the experiences of small businesses and brings them to the attention of service providers, lenders, and policymakers. Learn more from the SF Fed's Sarah Garrett Simms on how your survey responses help us do our work. Share your insights on small business conditions by November 1st! Make sure your #SmallBusiness voice is heard: https://sffed.us/SBCS24

Join us for a live discussion on generative AI and worker productivity with Michael Schwarz, Chief Economist at Microsoft, and Sylvain Leduc, Director of Research at the Federal Reserve Bank of San Francisco. They'll discuss how researchers are incrementally learning more about the impact of #AI in practice as greater numbers of people gain access to generative AI tools and use them to perform everyday #jobs. To register for the event and submit a question, please visit our website: https://sffed.us/3XXWKbq

Stable and affordable housing is foundational for participating in the economy. Homeownership is the primary form of wealth accumulation for most American families, and the COVID-19 pandemic upended housing markets. Our latest research brief tracks homebuying patterns during the pandemic and the years that followed, which shows an expansion of activity from historically marginalized buyers and longer-term shifts to smaller metros and rural areas. https://sffed.us/4dBY1up