The GSE Report March-April 2018

MJAARN. U- A ARPYR . 2 02 10 81 8
TRACKING THE GOVERNMENT’S ROLE IN THE FINANCIAL SERVICES INDUSTRY
The U.S. economy is in the second-longest expansion in its history. The labor market is booming, consumer and business spending are solid, and all other key economic indicators are flashing green. Added boosts are coming from a number of tailwinds, including supportive financial conditions, strong global growth, and the recent fiscal stimulus.
Over the next few years, we expect real GDP growth to average around 21⁄2%, well above its sustainable pace of 13⁄4%. This faster pace of growth will put further downward pressure on unemployment and contribute to the gradual rise of inflation, bringing it closer to the Fed’s 2% target.
Mary C. Daly
FedViews
Federal Reserve Bank of San Francisco April 12, 2018
ROBUST GDP GROWTH
Real GDP % change from four quarters
Further stren
% Unemployment rate an 4 Seasonally adjusted monthl
3 2 1 0 -1 -2 -3 -4
-5 2006 2008 2010 Source: Bureau of Labor Statis
Real GDP
Percent change from 4 quarters earlier
Robust GDP growth
Sustainable growth rate
2006 2008 2010
Source: Bureau of Economic Analysis and FRBSF staff
2016
2018 2020
2012 2014
FRBSF forecast
Q4
WHAT’S GOING ON?
Inflation moving back to target
Personal consumption expenditures (PCE) price inflation
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d foreca
y observati
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2012 tics and F
Bright outloo
Median of FOMC Summar
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2 Real GDP growth
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