Information received since the Federal Open Market Committee
met in June indicates that the labor market strengthened and that economic
activity has been expanding at a moderate rate.
Job gains were strong in June
following weak growth in May. On balance, payrolls and other labor market
indicators point to some increase in labor utilization in recent months.
Household spending has been growing strongly but business fixed investment has
been soft. Inflation has continued to run below the Committee's 2 percent
longer-run objective, partly reflecting earlier declines in energy prices and
in prices of non-energy imports.
Market-based measures of inflation
compensation remain low; most survey-based measures of longer-term inflation
expectations are little changed, on balance, in recent months.
Against this backdrop, the Committee decided to maintain the
target range for the federal funds rate at 1/4 to 1/2 percent.
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