Conclusion And this is my main message to you today. All the evidence suggests that, after a very brief recession two years ago and growth of 3 to 4 per cent per annum since the middle of 1998, the excess productive capacity in the economy is largely gone.
Smoothing through these fluctuations, inflation as measured by the price index for personal consumption expenditures (PCE) averaged near 2 percent over the past two years. In recent weeks, however, oil and gasoline prices have moderated and are now showing through to the headline inflation figures.