Overall financial conditions are supportive. Encouragingly, the housing sector has rebounded strongly from its initial decline, supported by historically low mortgage rates, and consumer spending on goods has held up well, in part reflecting earlier fiscal support.
18 At the same time, however, the strong pace of improvement in employment in May and June, which was importantly driven by recall hiring out of temporary layoffs, appears to have slowed. 19 And on the inflation front, despite some bounceback in July, inflation remains weaker than pre-crisis, and it is likely to take some time to return closer to target.