Such an adaptive approach does not throw out the framework that has successfully guided forecasting and policymaking in the past, but attempts, in real time, to adjust that approach based on the current data. Key Issues in the Economic Outlook The economy appears to have slowed to near a trend rate in the second quarter, after surprisingly robust growth in the previous quarter.
The underlying fundamentals of the expansion continue to look quite positive. There is solid momentum in employment and income, financial conditions are highly supporting, and consumer confidence has soared to record levels. I do not see any obstacles to the continuation of the expansion, with growth near trend, through 1998.