Webpacker error when running server for new Rails app

Just created a brand new Rails app and receiving this error when I run the server:

Webpacker can't find application.js in /public/packs/manifest.json. Possible causes:
1. You want to set webpacker.yml value of compile to true for your environment
   unless you are using the `webpack -w` or the webpack-dev-server.
2. webpack has not yet re-run to reflect updates.
3. You have misconfigured Webpacker's config/webpacker.yml file.
4. Your webpack configuration is not creating a manifest.
Your manifest contains:
{
}

Here's my webpacker.yml:

# Note: You must restart bin/webpack-dev-server for changes to take effect

default: &default
  source_path: app/javascript
  source_entry_path: packs
  public_output_path: packs
  cache_path: tmp/cache/webpacker
  webpack_compile_output: false

  # Additional paths webpack should lookup modules
  # ['app/assets', 'engine/foo/app/assets']
  resolved_paths: []

  # Reload manifest.json on all requests so we reload latest compiled packs
  cache_manifest: false

  extensions:
    - .js
    - .sass
    - .scss
    - .css
    - .module.sass
    - .module.scss
    - .module.css
    - .png
    - .svg
    - .gif
    - .jpeg
    - .jpg

development:
  <<: *default
  compile: true

  # Reference: https://webpack.js.org/configuration/dev-server/
  dev_server:
    https: false
    host: localhost
    port: 3035
    public: localhost:3035
    hmr: false
    # Inline should be set to true if using HMR
    inline: true
    overlay: true
    compress: true
    disable_host_check: true
    use_local_ip: false
    quiet: false
    headers:
      'Access-Control-Allow-Origin': '*'
    watch_options:
      ignored: '**/node_modules/**'


test:
  <<: *default
  compile: true

  # Compile test packs to a separate directory
  public_output_path: packs-test

production:
  <<: *default

  # Production depends on precompilation of packs prior to booting for performance.
  compile: false

  # Cache manifest.json for performance
  cache_manifest: true

After running ./bin/webpack, it recommended I install webpack-cli via yarn add -D. After I did this, I got the following error:

Error: Cannot find module 'webpack-cli'
Require stack:
- ../node_modules/webpack/bin/webpack.js
    at Function.Module._resolveFilename (internal/modules/cjs/loader.js:1030:15)
    at Function.Module._load (internal/modules/cjs/loader.js:899:27)
    at Module.require (internal/modules/cjs/loader.js:1090:19)
    at require (internal/modules/cjs/helpers.js:75:18)
    at ../node_modules/webpack/bin/webpack.js:143:5
    at processTicksAndRejections (internal/process/task_queues.js:93:5) {
  code: 'MODULE_NOT_FOUND',
  requireStack: [
 '../node_modules/webpack/bin/webpack.js'
  ]

I don't have a manifest.json - shouldn't this have been created automatically?

Any ideas?