The cut-off date for data included in the ECB staff macroeconomic projections was 30 November. As shown in Chart 1, the ECB tracks several indicators of underlying inflation. Each indicator has its advantages and disadvantages: monitoring a range of indicators helps to guard from any specific approach being affected by idiosyncratic factors and model uncertainty.
Business investment has been soft this year, partly reflecting the plunge in oil drilling. And net exports are being held down by weak economic growth in several of our major trading partners and the appreciation of the dollar. Looking forward, prospects are favorable for further improvement in the U.S. labor market and the economy more broadly.