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. An improving labor market is a crucial underpinning for our projection of moderate GDP growth of around 2½% to 2¾% this year. We also anticipate inflation to slowly fall below 2% next year as crude oil prices stabilize. 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.