Good day. Echoing other Federal Reserve officials, Chicago Fed President Charles Evans said the U.S. economy needs continued support from the government, adding that he is worried elected officials are fighting too much to deliver it. Also Thursday, Federal Reserve Bank of Atlanta President Raphael Bostic said in an interview with The Wall Street Journal’s Nick Timiraos that it would be a “real mistake” for federal policy makers to declare victory prematurely in supporting the economy from the shock of the coronavirus pandemic. The shock is still gripping economies across the world, and some of the world’s biggest developing...

Federal Reserve Bank of Cleveland President Loretta Mester discussed her outlook for the Fed’s response to the coronavirus pandemic and the central bank’s new policy framework in an interview with Wall Street Journal reporter Nick Timiraos on Wednesday, Sept. 2. Here is a partial transcript of the interview, lightly edited for clarity and length.

WSJ: Now that the framework review has established a new strategy and also identified the two tools that the committee thinks are the most likely to be effective, the question is,...

U.S. employers added 1.4 million jobs in August and the unemployment rate fell to 8.4%, the Labor Department reported Friday, as the economy continued to recover from the coronavirus pandemic.

The jobless rate has declined from a peak of near 15% in April, signaling Americans are getting back to work. Still, unemployment remains historically high. The unemployment rate was 3.5% in February, a half-century low, just ahead of the pandemic.

Federal Reserve officials unveiled a new approach to guide their interest rate decisions last week after a very busy year responding to the coronavirus pandemic. On Thursday, Federal Reserve Bank of Atlanta President Raphael Bostic said it would be a “real mistake” for federal policy makers to declare victory prematurely in supporting the economy from the current shock. Wall Street Journal reporter Nick Timiraos interviewed Mr. Bostic during a live online broadcast to explore how the Fed is navigating the tough decisions now confronting it. Here is a transcript of the event:

NICK TIMIRAOS: Hello. Welcome to another edition of Ask WSJ. I’m Nick Timiraos, The Wall Street Journal’s chief economics correspondent and today I’m joined by Raphael Bostic, president and CEO of the Federal Reserve Bank of Atlanta.

For the next 30 minutes or so we’re going to talk through the current economic outlook and the central bank’s response to the coronavirus pandemic. Please...

Good day. Echoing other Federal Reserve officials, Chicago Fed President Charles Evans said the U.S. economy needs continued support from the government, adding that he is worried elected officials are fighting too much to deliver it. Also Thursday, Federal Reserve Bank of Atlanta President Raphael Bostic said in an interview with The Wall Street Journal's Nick Timiraos that it would be a “real mistake” for federal policy makers to declare victory prematurely in supporting the economy from the shock of the coronavirus pandemic. The shock is still gripping economies across the world, and some of the world’s biggest developing countries are witnessing some of the steepest economic contractions on record.

Please note there won't be a Central Banking newsletter on Monday, Sept. 7, in observance of the Labor Day holiday in the U.S.

 Now on to today’s news and analysis.

Hiring likely eased in August from a faster pace earlier this summer, a sign the U.S. economy is settling in for a slow recovery after the coronavirus pandemic struck.

Economists expect employers added about 1.3 million jobs in August, a solid monthly payroll gain but the smallest in four months. State reopenings helped boost employment by a combined 7.5 million payrolls in May and June before hiring growth slowed in July.

Economists...

Is the Federal Reserve’s plan to target 2% inflation on average vague by design? To Raphael Bostic, the leader of the Federal Reserve Bank of Atlanta, the answer is a qualified “yes.”

Mr. Bostic, who spoke Thursday at a Wall Street Journal event, was addressing the central bank’s plan, revealed last week, that said the U.S. central bank would now operate with a flexible system of inflation-targeting seeking 2% on average. Left out of that was any formula or specifics with which to determine how the average would be measured....

The Federal Reserve has adequately and appropriately telegraphed its intentions to keep interest rates low for a long time to support the U.S. economy through the coronavirus pandemic-induced downturn, making any more explicit interest-rate guidance less urgent, said Federal Reserve Bank of Cleveland President Loretta Mester in an interview Wednesday.

“People understand where we’re going,” said Ms. Mester. “They understand that we’re going to be accommodative [with] monetary policy for quite some time.”

Federal Reserve Bank of Chicago President Charles Evans said Thursday the U.S. economy needs continued support from the government and he is worried elected officials are fighting too much to deliver it.

The country’s economy has been hard hit by the coronavirus pandemic and “more fiscal relief will be needed in order to limit further damage to the economy,” Mr. Evans said in the text of a speech to be delivered by video. But he said he was concerned that after some of the government’s support efforts have expired, “partisan...

Good day. Regional Fed presidents John Williams and Loretta Mester praised the Federal Reserve’s new policy regime, with the New York Fed leader saying it will help the central bank better achieve its job and inflation goals. Meantime, San Francisco Fed President Mary Daly said boosting fiscal support after recent cutbacks “would be appropriate” to help the economy. Meanwhile, Thomas Laubach, a top adviser to Fed Chairman Jerome Powell, died at age 55. Mr. Laubach authored seminal research used to measure estimates of the interest rate that neither spurs nor slows economic growth, work that underpinned shifts in Fed policy-making...

WASHINGTON—The U.S. trade deficit widened in July, as imports increased more than exports due to a rebound in domestic demand after coronavirus-related shutdowns.

The foreign-trade gap in goods and services expanded 19% from the prior month to a seasonally adjusted $63.56 billion in July, the Commerce Department said Thursday.

That was the largest monthly trade deficit since July 2008, during the 2007-2009 recession. Economists surveyed by The Wall Street Journal had expected a trade deficit of $58.6 billion.

The growth of the deficit reflected a pickup in Americans’ demand for foreign-made imports as states eased restrictions on business activities across the country. Imports increased 11% in July to $231.7 billion.

Exports, meanwhile, rose 8.1% to $168.1 billion from June’s $155.5 billion. Exports of vehicles, consumer goods, industrial supplies and capital goods all rose.

New applications for unemployment benefits fell last week, a possible sign of a slowly improving labor market and the impact of a new measurement method.

Weekly initial claims for jobless benefits fell by 130,000 to a seasonally adjusted 881,000 in the week ended Aug. 29, the Labor Department said Thursday. The number of people collecting unemployment benefits through regular state programs, which cover most workers, decreased by 1.24 million to about 13.3 million for the week ended Aug. 22.

Thomas Laubach, a top adviser to Federal Reserve Chairman Jerome Powell who led the central bank’s division of monetary affairs, died Wednesday at his home in Kensington, Md., after being treated for pancreatic cancer. He was 55.

Mr. Laubach was an influential thinker in monetary economics. He authored seminal research used to measure estimates of the interest rate that neither spurs nor slows economic growth, work that underpinned shifts in Fed policy-making in recent years.

As director of monetary affairs, he was a key participant in meetings of the central bank’s rate-setting Federal Open Market Committee, tasked with preparing briefings, strategies and the heavily scrutinized policy statements delivered upon their conclusion.

“I will miss Thomas as both a colleague and a friend. He was a world-class economist, committed to public service and universally respected for his significant contributions to the theory and practice of monetary policy,”...

Applications for unemployment benefits are expected to have eased again last week, a possible sign of a slowly improving labor market and the impact of a new measurement method.

Weekly initial claims for jobless benefits had stabilized near 1 million in recent weeks, remaining well above the highest level recorded before this year. Similarly, the number receiving unemployment payments edged down this summer, but also has been well above any level recorded before the coronavirus pandemic.

Good day. Regional Fed presidents John Williams and Loretta Mester praised the Federal Reserve's new policy regime, with the New York Fed leader saying it will help the central bank better achieve its job and inflation goals. Meantime, San Francisco Fed President Mary Daly said boosting fiscal support after recent cutbacks “would be appropriate” to help the economy. Meanwhile, Thomas Laubach, a top adviser to Fed Chairman Jerome Powell, died at age 55. Mr. Laubach authored seminal research used to measure estimates of the interest rate that neither spurs nor slows economic growth, work that underpinned shifts in Fed policy-making in recent years.

Now on to today’s news and analysis.

The Monetary Authority of Singapore will take several measures to boost banks’ access to Singapore dollar and U.S. dollar funding, the central bank said Thursday.

The new measures will strengthen the banking sector’s resilience, facilitate more stable Singapore dollar and U.S. dollar funding conditions and support credit intermediation amid the coronavirus pandemic, the central bank said.

A...

Two Federal Reserve officials said Wednesday that the central bank’s new policy-making framework will improve the odds of achieving the Fed’s job and inflation goals, while offering few clues if the central bank will provide additional support to the economy.

The new regime is “an important evolution in our thinking about how to achieve our goals and another step toward greater transparency,” Federal Reserve Bank of New York President John Williams said during a virtual presentation. He also said the new framework “positions...

Federal Reserve Bank of San Francisco President Mary Daly said Wednesday that reduced government support efforts will slow the economic recovery if they aren’t restored.

Boosting fiscal support after recent cutbacks “would be appropriate,” Ms. Daly told reporters after video remarks. While she didn’t discuss specifics, if support isn’t restored to its previous levels, it could be a “headwind” to growth with a “disproportionate” effect on those who are struggling the most, the regional Fed president said.

Thomas Laubach, a top adviser to Federal Reserve Chairman Jerome Powell who led the central bank’s division of monetary affairs, died Wednesday at his home in Kensington, Md., after being treated for pancreatic cancer. He was 55.

Mr. Laubach was an influential thinker in monetary economics. He authored seminal research used to measure estimates of the interest rate that neither spurs nor slows economic growth, work that underpinned shifts in Fed policy-making in recent years.

You wouldn’t have picked Shinzo Abe as globalization’s future champion when he became prime minister of Japan in 2012. He was a proud nationalist intent on rekindling Japanese patriotism, loosening the shackles on the country’s military, and playing down its past aggression. No free-market ideologue, he criticized his predecessor’s negotiations to join the Trans-Pacific Partnership, an ambitious trade pact with the U.S. and 10 other Pacific nations.

Yet by the time Mr. Abe announced his resignation last week, he had presided...

The U.S. economy grew modestly over the summer but remained well below its pre-pandemic level of activity, a Federal Reserve report said Wednesday.

The report painted a picture of an economy moving on multiple tracks. Some industries—such as residential construction and real estate, auto sales or manufacturing—saw pent-up customer demand return as coronavirus-related lockdowns eased. One Boston furniture retailer reported sales were running 30% above last summer.

The Federal Reserve will need to continue providing significant and sustained support to the economy as it faces a slowing labor-market recovery, Tom Barkin, president of the Federal Reserve Bank of Richmond, said in an interview with The Wall Street Journal.

Mr. Barkin said the labor market’s recovery has been slower than he anticipated because the coronavirus has proven harder to contain than he expected. How individuals comply with public-health protocols will be a key factor in determining the durability of any recovery,...

Federal Reserve Bank of New York leader John Williams said the central bank’s plan to allow inflation to overshoot its 2% target to compensate for times when it runs short of that goal will help the central bank better achieve its job and inflation goals.

The new policy regime is “an important evolution in our thinking about how to achieve our goals and another step toward greater transparency,” Mr. Williams said in a virtual presentation Wednesday, adding the change “positions us for success in achieving our maximum employment...

Federal Reserve Bank of Cleveland President Loretta Mester said Wednesday more government aid is essential to help the U.S. economy weather ongoing stresses caused by the coronavirus pandemic.

“Several key parts of the fiscal policy support already in place are expiring,” Ms. Mester said in the text of a prepared virtual speech. “Given economic conditions, it seems clear that further fiscal support is needed to provide a bridge for households, small businesses, and state and local municipalities that have borne the brunt of...

WASHINGTON—U.S. government debt will exceed the size of the economy in the government’s 2021 fiscal year, a milestone not hit since World War II that has been brought into reach by a giant fiscal response to the coronavirus pandemic.

The Congressional Budget Office said Wednesday that federal debt held by the public is projected to reach or exceed 100% of U.S. gross domestic product, the broadest measure of U.S. economic output, in the fiscal year that begins on Oct. 1. That would put the U.S. in the company of a handful...