|Monetary Policy Report forwarded to the Congress on July 20, 2000

Section 1
    
MONETARY 
POLICY 
AND 
THE 
ECONOMIC  
OUTLOOK

The impressive performance of the U.S. economy persisted in the
first half of 2000 with economic activity expanding at a rapid pace.
Overall rates of inflation were noticeably higher, largely as a result
of steep increases in energy prices. The remarkable wave of new
technologies and the associated surge in capital investment have
continued to boost potential supply and to help contain price pressures
at high levels of labor resource use. At the same time, rising
productivity growth--working through its effects on wealth and
consumption, as well as on investment spending--has been one of the
important factors contributing to rapid increases in aggregate demand
that have exceeded even the stepped-up increases in potential
supply. Under such circumstances, and with the pool of available labor
already at an unusually low level, the continued expansion of aggregate
demand in excess of the growth in potential supply increasingly
threatened to set off greater price pressures. Because price stability
is essential to achieving maximum sustainable economic growth, heading
off these pressures has been critical to extending the extraordinary
performance of the U.S. economy.

To promote balance between aggregate demand and potential supply
and to contain inflation pressures, the Federal Open Market Committee
(FOMC) took additional firming actions this year, raising the benchmark
federal funds rate 1 percentage point between February and May.
The tighter stance of monetary policy, along with the ongoing strength
of credit demands, has led to less accommodative
financial conditions: On balance, since the beginning of
the year, real interest rates have increased, equity prices
have changed little after a sizable run-up in 1999, and lenders have
become more cautious about extending credit, especially to marginal
borrowers. Still, households and businesses have continued to borrow at
a rapid pace, and the growth of M2 remained relatively robust, despite
the rise in market interest rates. The favorable outlook for the U.S.
economy has contributed to a further strengthening of the dollar,
despite tighter monetary policy and rising interest rates in most other
industrial countries.

Perhaps partly reflecting firmer financial conditions, the
incoming economic data since May have suggested some moderation in the
growth of aggregate demand. Nonetheless, labor markets remained tight
at the time of the FOMC meeting in June, and it was unclear whether the
slowdown represented a decisive shift to more sustainable growth or
just a pause. The Committee left the stance of policy unchanged but
saw the balance of risks to the economic outlook as still weighted
toward rising inflation.


Monetary Policy, Financial Markets,
and the Economy over the First Half of 2000

When the FOMC convened for its first two meetings of the year, in
February and March, economic conditions in the United States were
pointing toward an increasingly taut labor market as a consequence of
a persistent imbalance between the growth rates of aggregate
demand and potential aggregate supply. Reflecting the underlying
strength in spending and expectations of tighter monetary policy,
market interest rates were rising, especially after the century date
change passed without incident. But, at the same time, equity prices
were still posting appreciable gains on net. Knowing that the two
safety valves that had been keeping underlying inflation from picking
up until then--the economy's ability to draw on the pool of available
workers and to expand its trade deficit on reasonable terms--could not
be counted on indefinitely, the FOMC voted for a further tightening in
monetary policy at both its February and its March meetings, raising
the target for the overnight federal funds rate 25 basis points
on each occasion. In related actions, the Board of Governors also
approved quarter-point increases in the discount rate in both February
and March.
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|Chart of Selected interest ratesThe FOMC considered larger policy moves at its first two meetings
of 2000 but concluded that significant uncertainty about the outlook
for the expansion of aggregate demand in relation to that of aggregate
supply, including the timing and strength of the economy's response to
earlier monetary policy tightenings, warranted a more limited policy
action. Still, noting that there had been few signs that the rise in
interest rates over recent quarters had begun to bring demand in line
with potential supply, the Committee decided in both instances that the
balance of risks going forward was weighted mainly in the direction of
rising inflation pressures. In particular, it was becoming increasingly
clear that the Committee would need to move more aggressively at a
later meeting if imbalances continued to build and inflation and
inflation expectations, which had remained relatively subdued until
then, began to pick up. 1

 
Some readings between the March and May meetings
of the FOMC on labor costs and prices suggested a possible increase of
inflation pressures. Moreover, aggregate demand had continued to grow
at a fast clip, and markets for labor and other resources were showing
signs of further tightening. Financial market conditions had firmed in
response to these developments; the substantial rise in private
borrowing rates between March and May had been influenced by the
buildup in expectations of more policy tightening as market
participants recognized the need for higher short-term interest rates.
Given all these circumstances, the FOMC decided in May to raise the
target for the overnight federal funds rate 50 basis points, to
6-1/2 percent. The Committee saw little risk in the more
forceful action given the strong momentum of the economic expansion and
widespread market expectations of such an action. Even after
taking into account its latest action, however, the FOMC saw the
strength in spending and pressures in labor markets as indicating that
the balance of risks remained tilted toward rising inflation.

 
By the June FOMC meeting, the incoming data were suggesting that
the expansion of aggregate demand might be moderating toward a more
sustainable pace: Consumers had increased their outlays for goods
modestly during the spring; home purchases and starts appeared to have
softened; and readings on the labor market suggested that the pace of
hiring might be cooling off. Moreover, much of the effects on demand of
previous policy firmings, including the 50 basis point tightening
in May, had not yet been fully realized. Financial market participants
interpreted signs of economic slowing as suggesting that the Federal
Reserve probably would be able to hold inflation in check without much
additional policy firming. However, whether aggregate demand had moved
decisively onto a more moderate expansion track was not yet clear, and
labor resource utilization remained unusually elevated. Thus, although
the FOMC decided to defer any policy action in June, it indicated
that the balance of risks was still on the side of rising inflation in
the foreseeable future. 2

Economic Projections for 2000 and 2001

The members of the Board of Governors and the
Federal Reserve Bank presidents expect the current economic expansion
to continue through next year, but at a more moderate pace than the
average over recent quarters. For 2000 as a whole, the central tendency
of their forecasts for the rate of increase in real gross
domestic product (GDP) is 4 percent to 4-1/2 percent,
measured as the change between the fourth quarter of 1999 and the
fourth quarter of 2000. Over the four quarters of 2001, the central
tendency forecasts of real GDP are in the 3-1/4 percent to
3-3/4 percent range. With this pace of expansion, the
civilian unemployment rate should remain near its recent level of
4 percent. Even with the moderation in the pace of economic
activity, the Committee members and nonvoting Bank presidents expect
that inflation may be higher in 2001 than in 1999, and the Committee
will need to be alert to the possibility that financial conditions may
need to be adjusted further to balance aggregate demand and potential
supply and to keep inflation low.
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|1.
Economic projections for
2000 and 2001PercentAccessible tabletable ruleFederal Reserve governors and
Reserve Bank presidentsIndicator
    RangeCentral tendencyAdministration2000Change, fourth
quarter to fourth
quarter1Nominal
GDP6 to 7-1/46-1/4 to 6-3/46.0Real
GDP23-3/4 to 54 to 4-1/23.9PCE prices2
to 2-3/42-1/2 to
2-3/43.23Average
level, fourth quarterCivilian unemployment
    rate4 to
4-1/4About 44.12001Change, fourth
quarter to fourth
quarter1Nominal
GDP5 to 6-1/45-1/2 to 65.3Real
GDP22-1/2 to 43-1/4 to 3-3/43.2PCE prices1-3/4
to 32 to
2-1/22.53Average
level, fourth quarterCivilian unemployment
    rate4 to
4-1/24 to 4-1/44.2table rule1.  Change
	from average for fourth quarter of previous year to average
	for fourth quarter of year indicated.
          2.  Chain-weighted.
          3.  Projection for the consumer
	price index.



 
      Considerable uncertainties attend estimates 
        of potential supply--both the rate of growth and the level of the economy's 
        ability to produce on a sustained non-inflationary basis. Business investment 
        in new equipment and software has been exceptionally high, and given the 
        rapid pace of technological change, firms will continue to exploit opportunities 
        to implement more-efficient processes and to speed the flow of information 
        across markets. In such an environment, a further pickup in productivity 
        growth is a distinct possibility. However, a portion of the very rapid 
        rise in measured productivity in recent quarters may be a result of the 
        cyclical characteristics of this expansion rather than an indication of 
        structural rates of increase consistent with holding the level of resource 
        utilization unchanged. Current levels of labor resource utilization are 
        already unusually high. To date, this has not led to escalating unit labor 
        costs, but whether such a favorable performance in the labor market can 
        be sustained is one of the important uncertainties in the outlook.


On the demand side, the adjustments in financial markets that
have accompanied expected and actual tighter monetary conditions may be
beginning to moderate the rise in domestic demand. As that process
evolves, the substantial impetus that household spending has received
in recent years from rapid gains in equity wealth should subside. The
higher cost of business borrowing and more-restrictive credit supply
conditions probably will not exert substantial restraint on investment
decisions, particularly as long as the costs and potential productivity
payoffs of new equipment and software remain attractive. The slowing in
domestic spending will not be fully reflected in a more moderate
expansion of domestic production. Some of the slowing will be absorbed
in smaller increases in imports of goods and services, and given
continued recovery in economic activity abroad, domestic firms are
expected to continue seeing a boost to demand and to production from
rising exports.


Regarding inflation, FOMC participants believe that the rise in
consumer prices will be noticeably larger this year than in 1999 and
that inflation will then drop back somewhat in 2001. The central
tendency of their forecasts for the increase in the chain-type index
for personal consumption expenditures is 2-1/2
percent to 2-3/4 percent over the four quarters of
2000 and 2 percent to 2-1/2 percent during 2001.
Shaping the contour of this inflation forecast is the expectation that
the direct and indirect effects of the boost to domestic inflation this
year from the rise in the price of world crude oil will be partly
reversed next year if, as futures markets suggest, crude oil prices
retrace this year's run-up by next year. Nonetheless, these forecasts
show consumer price inflation in 2001 to have moved above the rates
that prevailed over the 1997-98 period. Such a trend, were it not to
show signs of quickly stabilizing or reversing, would pose a
considerable risk to the continuation of the extraordinary economic
performance of recent years.


The economic forecasts of the FOMC are similar
to those recently released by the Administration in its Mid-Session
Review of the Budget. Compared with the forecasts available in
February, the Administration raised its projections for the increase in
real GDP in 2000 and 2001 to rates that lie at the low end of the
current range of central tendencies of Federal Reserve policymakers.
The Administration also expects that the unemployment rate will remain
close to 4 percent. Like the FOMC, the Administration sees
consumer price inflation rising this year and falling back in 2001.
After accounting for the differences in the construction of the
alternative measures of consumer prices, the Administration's
projections of increases in the consumer price index (CPI) of 3.2
percent in 2000 and 2.5 percent in 2001 are broadly consistent
with the Committee's expectations for the chain-type price index for
personal consumption expenditures.





Footnote



1.   At its March and May meetings,
the FOMC took a number of
actions that were aimed at adjusting the implementation of monetary
policy to actual and prospective reductions in the stock of Treasury
debt securities. These actions are described in the discussion of U.S.
financial markets.  Return to text2.   At its June meeting, the FOMC did not establish ranges for
growth of money and debt in 2000 and 2001. The legal requirement to
establish and to announce such ranges had expired, and owing to
uncertainties about the behavior of the velocities of debt and money,
these ranges for many years have not provided useful benchmarks for the
conduct of monetary policy. Nevertheless, the FOMC believes that the
behavior of money and credit will continue to have value for gauging
economic and financial conditions, and this report discusses recent
developments in money and credit in some detail.Return to textSection 2Home |
News and events |
Monetary policy |
July 2000 report
Accessibility | Contact UsLast update: July 20, 2000, 10:00 AM | 1.                                                             | Economic projections for
2000 and 2001PercentAccessible table | table rule     | Federal Reserve governors and
Reserve Bank presidentsIndicator
    RangeCentral tendencyAdministration2000Change, fourth
quarter to fourth
quarter1Nominal
GDP6 to 7-1/46-1/4 to 6-3/46.0Real
GDP23-3/4 to 54 to 4-1/23.9PCE prices2
to 2-3/42-1/2 to
2-3/43.23Average
level, fourth quarterCivilian unemployment
    rate4 to
4-1/4About 44.12001Change, fourth
quarter to fourth
quarter1Nominal
GDP5 to 6-1/45-1/2 to 65.3Real
GDP22-1/2 to 43-1/4 to 3-3/43.2PCE prices1-3/4
to 32 to
2-1/22.53Average
level, fourth quarterCivilian unemployment
    rate4 to
4-1/24 to 4-1/44.2 |       | Federal Reserve governors and
Reserve Bank presidents |                | Indicator | Range | Central tendency                            | Administration |  | 2000 | Change, fourth
quarter to fourth
quarter1 |            |                |     | Nominal
GDP | 6 to 7-1/4 | 6-1/4 to 6-3/4 | 6.0 | Real
GDP2 | 3-3/4 to 5  | 4 to 4-1/2      | 3.9  | PCE prices                     | 2
to 2-3/4 | 2-1/2 to
2-3/4 | 3.23 | Average
level, fourth quarter  |             |         |     | Civilian unemployment
    rate | 4 to
4-1/4 | About 4 | 4.1  |                                             |  |  | 2001 | Change, fourth
quarter to fourth
quarter1 |            |            |     | Nominal
GDP | 5 to 6-1/4 | 5-1/2 to 6     | 5.3 | Real
GDP2 | 2-1/2 to 4  | 3-1/4 to 3-3/4 | 3.2  | PCE prices                     | 1-3/4
to 3 | 2 to
2-1/2 | 2.53 | Average
level, fourth quarter  |             |            |     | Civilian unemployment
    rate | 4 to
4-1/2 | 4 to 4-1/4 | 4.2 | table rule
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Economic projections for
2000 and 2001PercentAccessible table
|table rule                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Federal Reserve governors and
Reserve Bank presidentsIndicator
    RangeCentral tendencyAdministration2000Change, fourth
quarter to fourth
quarter1Nominal
GDP6 to 7-1/46-1/4 to 6-3/46.0Real
GDP23-3/4 to 54 to 4-1/23.9PCE prices2
to 2-3/42-1/2 to
2-3/43.23Average
level, fourth quarterCivilian unemployment
    rate4 to
4-1/4About 44.12001Change, fourth
quarter to fourth
quarter1Nominal
GDP5 to 6-1/45-1/2 to 65.3Real
GDP22-1/2 to 43-1/4 to 3-3/43.2PCE prices1-3/4
to 32 to
2-1/22.53Average
level, fourth quarterCivilian unemployment
    rate4 to
4-1/24 to 4-1/44.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                | Federal Reserve governors and
Reserve Bank presidents         |                | Indicator                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Range | Central tendency                                       | Administration |           | 2000  | Change, fourth
quarter to fourth
quarter1 |                |  |      | Nominal
GDP                                | 6 to 7-1/4 | 6-1/4 to 6-3/4 | 6.0 | Real
GDP2   | 3-3/4 to 5 | 4 to 4-1/2     | 3.9 | PCE prices | 2
to 2-3/4 | 2-1/2 to
2-3/4 | 3.23 | Average
level, fourth quarter |             |                 |      | Civilian unemployment
    rate | 4 to
4-1/4 | About 4 | 4.1 |                                 |             |         | 2001 | Change, fourth
quarter to fourth
quarter1 |  |  |      | Nominal
GDP                                | 5 to 6-1/4 | 5-1/2 to 6 | 5.3 | Real
GDP2   | 2-1/2 to 4 | 3-1/4 to 3-3/4 | 3.2 | PCE prices | 1-3/4
to 3 | 2 to
2-1/2    | 2.53 | Average
level, fourth quarter |             |             |      | Civilian unemployment
    rate | 4 to
4-1/2 | 4 to 4-1/4 | 4.2
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Federal Reserve governors and
Reserve Bank presidents         |                                                               
|Indicator                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Range                                                          | Central tendency                                               | Administration
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 2000                                                          
|Change, fourth
quarter to fourth
quarter1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                |                                                                |               
|Nominal
GDP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 6 to 7-1/4                                                     | 6-1/4 to 6-3/4                                                 | 6.0           
|Real
GDP2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 3-3/4 to 5                                                     | 4 to 4-1/2                                                     | 3.9           
|PCE prices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 2
to 2-3/4                                                    | 2-1/2 to
2-3/4                                                | 3.23          
|Average
level, fourth quarter                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                |                                                                |               
|Civilian unemployment
    rate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 4 to
4-1/4                                                    | About 4                                                        | 4.1           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 2001                                                          
|Change, fourth
quarter to fourth
quarter1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                |                                                                |               
|Nominal
GDP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 5 to 6-1/4                                                     | 5-1/2 to 6                                                     | 5.3           
|Real
GDP2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 2-1/2 to 4                                                     | 3-1/4 to 3-3/4                                                 | 3.2           
|PCE prices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 1-3/4
to 3                                                    | 2 to
2-1/2                                                    | 2.53          
|Average
level, fourth quarter                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                |                                                                |               
|Civilian unemployment
    rate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 4 to
4-1/2                                                    | 4 to 4-1/4                                                     | 4.2           
|table rule