The labor market remains strong, economic activity is increasing at a moderate pace, and the Federal Open Market Committee's (FOMC) baseline outlook is for a continuation of this performance in 2020.2 At present, personal consumption expenditures, or PCE, price inflation is running somewhat below the Committee's 2 percent objective, but we project that, under appropriate monetary policy, inflation will rise gradually to our symmetric 2 percent objective.
Although the unemployment rate is around a 50-year low, wages are rising broadly in line with productivity growth and underlying inflation. We are not seeing any evidence to date that a strong labor market is putting excessive cost-push pressure on price inflation.