The Congressional Joint Economic Committee has released a very positive economic report this week. Some highlights:
– Payroll employment rose by 78,000 in May. The unemployment rate edged down to 5.1%.
– GDP growth was 3.5% in the 1st quarter, following 3.8% growth in the 4th quarter of 2004. Forecasters see a continuation of healthy growth.
– Inflation in the ‘core’ consumer price index, which excludes volatile energy and food prices, moderated to 2.2% in May on a year-over-year basis.
– Markets expect that the Fed will continue to raise its target for overnight interest rates, which it has raised from 1% in late June 2004 to the current 3% in a sequence of quarter-point increases.
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