Sandra Pianalto, president of the Federal Reserve Bank of Cleveland, expects the U.S. economy to gradually improve from 2.5% growth this year to 3.0% growth next year. She cited positive information from the labor markets. She observed that it would take four or five years fo such growth for the unemployment rate to return to the pre-crisis level of around 6%.
On the negative side, she observed that uncertainty remains, that the housing market is still not strong, and the price of gas may continue to rise, acting as a brake on growth. Consumer confidence was at a four year high last month, however, and inflation remains below the Fed’s 2% target.