There are also important downside risks abroad. Most immediately, a “no-deal Brexit” would have adverse consequences for Britain, and potentially more broadly, given London’s role as a financial center. Within the euro area, countries such as Italy and France face domestic challenges. And a hard landing in China would have spillovers through financial and trade channels.
Employment, Inflation, and Policy In contrast to the softening in spending indicators, job gains have remained strong so far. Job gains have averaged 240,000 per month over the past three months--more than twice the pace necessary to absorb new entrants into the labor force. The January unemployment rate of 4 percent is near a multidecade low.