Meanwhile, there are tentative and encouraging signs of a firming in wages, seen most clearly in the data on average hourly earnings, which are rising faster than inflation and productivity. All told, labor market indicators show an economy on solid footing. Recent spending data have been less positive than the labor market data. Growth of personal consumption slowed noticeably in the first quarter.
Business fixed investment has fallen for two consecutive quarters, mainly because of a steep decline in energy-related capital expenditures. As a result, gross domestic product (GDP) growth over the two quarters ending in March 2016 is estimated to have averaged only 1 percent on an annualized basis.