More broadly, prolonged high unemployment would pose a risk to consumer spending and hence to the sustainability of the recovery. The outlook for inflation Let me turn now to the outlook for inflation. Generally speaking, measures of underlying inflation have been trending downward.
For example, so-called core PCE price inflation (which is based on the broad-based price index for personal consumption expenditures and excludes the volatile food and energy components of the overall index) has declined from approximately 2.5 percent at an annual rate in the early stages of the recession to an annual rate of about 1.1 percent over the first eight months of this year.