ETC: Economic Trends & Conditions

Recent data indicate that economic activity has continued to expand at a moderate pace in recent months. Amid slow job growth, sluggish business investment, and subdued inflation, the FOMC moved to provide additional monetary stimulus at its September meeting. The additional monetary stimulus is expected to support a stronger recovery. GDP is expected to expand […]

Recent data have generally disappointed and suggest some loss of momentum in the ongoing economic recovery. Manufacturing activity, one of the bright spots so far in the recovery, is cooling, and a recent increase in the saving rate suggests that consumers may have become more cautious. In line with the tepid outlook for growth, unemployment is expected to decline very gradually to slightly below 8% by the end of 2013.

In the early stages of past recoveries, residential construction made significant contributions. This time, several years after the Great Recession ended, housing remains deeply depressed. Outside housing, however, the recent economic news has generally been a bit better than expected.

Recent data on the economy have been mixed. While labor market conditions continued to improve in February, some other data releases suggested softening. In particular, personal consumption expenditures have been relatively flat since October 2011.

The Twelfth District economy continued to grow at a moderate pace during the reporting period of late November through the end of December.

Incoming data have generally been better than expected over the past month, suggesting that the U.S. economy continues to grow at a moderate pace. Meanwhile, conditions continue to fare moderately worse in the Twelfth Federal Reserve District than in the nation as a whole, with unemployment rates in many District states remaining well above the national unemployment rate.

Recent data have been somewhat better than expected, helping ease concerns that the economy may be stalling. We expect that real GDP will grow moderately through the end of next year. Such slow growth is unlikely to push down the unemployment rate this year, and we anticipate only modest declines next year. There are some serious downside risks to this outlook.

The March earthquake and tsunami in Japan disrupted U.S. production in the auto and a few other manufacturing industries, which reduced second-quarter growth but probably increased growth in the third quarter, as idled production started coming back on line and extra shifts were added to bring inventories back to normal levels. Meanwhile, conditions continue to fare moderately worse in the Twelfth Federal Reserve District than in the nation as a whole.

Recent economic news has been disappointing, confirming that the economy has been growing much less quickly than was expected earlier in the year. The easing of some of the economic headwinds should allow growth to pick up in coming quarters, though evidence suggests that some of the recent weakness is persistent. Meanwhile, conditions continue to fare moderately worse in the Twelfth Federal Reserve District than in the nation as a whole.