Corporate profits have been strong, and larger nonfinancial corporations with access to capital markets have been able to refinance existing debt and lock in funding at lower yields. Borrowing conditions for businesses generally have continued to ease, although, as mentioned, the availability of credit appears to remain relatively limited for some small firms. Inflation has picked up so far this year.
The price index for personal consumption expenditures (PCE) rose at an annual rate of more than 4 percent over the first five months of 2011, and 2-1/2 percent on a 12-month basis. Much of the acceleration was the result of higher prices for oil and other commodities and for imported goods.