Increasing positive trends in the U.S. economy, but can they be sustained?
- Economic conditions in United States continue to firm up, while global economic activity softens
- Global manufacturing is a bright spot as the cycle bottoms out
- The improvement of the labor market is key, but presents risks of a trade-off
between more jobs and weaker productivity gains
- Acceleration in inflation is unlikely—commodity prices are lower, inflation expectations
stable, and there is large excess slack in the economy
- Higher gasoline and oil prices are more of a tax on the consumer and lead to slower
economic growth, rather than higher inflation
- Accommodating monetary policy will most likely remain, as long as output gap remains large
