Many economists have adjusted their US growth forecasts for 2008 downward. Some have made downward adjustments by as little as 0.4 percentage point or as much as 2.4 percentage points. What is unknown, really, is the length and depth of this slowdown. Some have characterized this is possibly SHORT and SHALLOW, others SHORT and SHARP.
Beyond short-term developments, we expect that wage moderation in the euro area will continue and that demand pressure on prices will remain subdued, although there are some grounds for concern about forthcoming wage negotiations. It is therefore particularly important to point to the indispensable role of continued wage moderation in fostering employment and maintaining a favourable outlook for price stability.