The economy has clearly gotten past its earlier soft patch, the labour market has been strong and housing markets have begun to rebound. Although household debt levels remain high, mortgage underwriting rules are helping to contain financial vulnerabilities. This solid starting point means the economy has a welcome degree of resilience to possible negative economic developments.
That said, we agreed that the data show some areas of concern. Among these is the weakness in consumption. It is difficult to square the softness in consumption with the strength in labour income. And, of course, we are concerned about the drop in business investment, which is likely linked to ongoing trade war and related uncertainty.