Caution, however, has returned as personal consumption has been curtailed by higher prices for gasoline and other daily necessities, leading to a slight decline in the growth rate of the economy overall. Moreover, job market data for May showed that nonfarm payroll employment was well below market forecasts, indicating that the recovery in the job market remains shaky.
With balance-sheet adjustments continuing to be a burden and the path for addressing the fiscal deficit unclear, the need to pay attention to downward risks is increasing. Even though upward momentum is currently weak, however, the Bank’s main scenario, which expects the U.S. economy to recover moderately, remains unchanged.