FedViews

GDP growth in the first quarter of 2011 came in at a disappointing 1.8% annualized pace, down from 3.1% in the fourth quarter of 2010. However, there is reason to believe that this slowdown is transitory. Our forecast projects moderate growth of around 3% in the current quarter and close to 4% in the second […]

Much of the recent economic news has been disappointing, with notably weaker data for consumer spending, business investment, and government purchases. Over the past two months, our forecast for first-quarter real GDP growth has been revised down by over a percentage point to an annual rate of less than 2%. In addition, the list of […]

The economy has shown more signs that recovery is proceeding at a moderate pace. Real consumer spending rose solidly in the last three months of 2010, although it dipped slightly in January due partly to weather. Vehicles sales have been increasing steadily over the past year and rose strongly in February, up 27% from the […]

The economic recovery has strengthened, with a self-sustaining private-sector dynamic taking hold in which increased spending leads to greater production and income and vice versa. Greater confidence is apparent in stock prices, which have posted steady gains since the middle of last year. However, financial institution valuations are less than 60% and homebuilder valuations are […]

Looking back, our 2010 economic forecast issued a year ago of moderate growth and low inflation proved relatively accurate. We predicted that real GDP would grow 3.4% last year. Based on data available today, growth appears to have been a bit below 3%. The slightly slower-than-expected growth reflects the soft patch the economy went through […]

Financial market concerns about Europe reemerged over the past few weeks. In the spring, markets focused primarily on the unsustainable fiscal trajectory in Greece. Those concerns subsided in late spring when the European Union and the International Monetary Fund announced a special package of loans for Greece conditional on severe fiscal cutbacks, which the Greek […]

The Federal Open Market Committee decided on November 3 to expand the Federal Reserve’s holdings of securities to provide additional support for the economy. In addition to maintaining its existing policy of reinvesting principal payments from its securities holdings, the FOMC authorized purchases of a further $600 billion of longer-term Treasury securities by the end […]

On September 20, the National Bureau of Economic Research’s Business Cycle Dating Committee officially called an end to the recession. It will go into the history books as the longest and deepest downturn since the Great Depression. The recession officially lasted 18 months from December 2007 to June 2009. Over that time, the U.S. economy […]

The economic recovery has lost some momentum in recent months. Not counting the effects of hiring for the 2010 census, employment was rising by several hundred thousand jobs per month earlier in the year. Since May, these gains have averaged only 55,000 jobs per month. Consumer spending continues to grow, but at a fairly modest […]

Some recent data have been below expectations, but the overall economic picture remains one of continued growth at a moderate pace. Some downside risks to the outlook are apparent, including weakness in consumer confidence, the labor market, and the real estate sector, as well as the economic situation in Europe. Real GDP increased at an […]