The Federal Open Market Committee’s Policy Statement from its January 27-28 meeting provides a favorable outlook for the US economy with solid economic growth and strong job gains and renewed momentum heading into 2015.
Real gross domestic product, our broadest measure of inflation-adjusted income and spending, advanced at a 2.5 percent rate during the past year, weighed down considerably by the severe weather-related decline in 2014Q1; real GDP growth exceeded 4 percent in the final three quarters of 2014.. This healthy growth generated more than three million new jobs during 2014, and the Employment Report for January 2015 brought even more good news from the American labor market. 257,000 new jobs were created and upward revisions to already strong gains in prior months lifted the cumulative 3-month job gain above one million. At 5.7 percent, the unemployment rate is down almost a full percentage point from a year ago, and wage growth rebounded in January, suggesting that December’s puzzling decline was an anomaly.