But the gains have been broader than that, and some measures of business sentiment remain quite strong. Exports also have risen this year, as growth abroad has solidified and the exchange value of the dollar has declined somewhat. My fellow FOMC participants and I perceive that risks to global growth have receded somewhat and expect growth to continue to improve over the near term.
The biggest surprise in the U.S. economy this year has been inflation. Earlier this year, the 12month change in the price index for personal consumption expenditures (PCE) reached 2 percent, and core PCE inflation reached 1.9 percent.