Consumer and business confidence remain favorable, despite a slight dip in consumer sentiment in early April, and, with accommodative financial conditions, I expect that the economy will continue to expand at a solid pace this year. On the inflation front, broad measures of consumer inflation have risen somewhat faster than they did in the year-earlier period, boosted by higher energy prices.
Focusing on the core price index, which excludes food and energy, it too has been a bit higher than it was the year before, likely reflecting the indirect effects of rising energy prices and the falling dollar. Productivity is slowing from its exceptional pace of the past couple years and unit labor costs are again increasing.