World export volumes did continue to expand however, increasing by 3.5 per cent in 1998, albeit well below the average for the 1990s. Export volumes are expected to grow at a similar rate in 1999, constrained by continued weak growth in several developing regions and growth moderation in Europe. The US economy continues to show signs of robust growth, with the June Beige Book survey indicating that economic conditions in most US Federal districts remain buoyant. Despite tight labour markets, with unemployment hitting a 29-year low of 4.2 per cent in April before edging higher to 4.3 per cent in May, unit labour costs remain constrained by strong productivity growth. However, the stock market continues to be significantly overvalued according to conventional measures of equity valuations.
Economic indicators show strength in most sectors of the economy.
The April 1999 survey by the US National Association of Purchasing Managers showed the third consecutive rise, indicating continued expansionary conditions. Signs of renewed strengthening in the manufacturing sector are also evident, with industrial production up 0.4 per cent in May, after two consecutive monthly rises of 0.2 per cent. Core durable goods orders were up 0.9 per cent in April, following a 2 per cent rise in March, and are currently 6.3 per cent higher than a year ago. This, combined with strong retail sales and consumer confidence, indicates that US domestic demand remains robust. In late March, the European Commission cut its EU growth forecast by 0.3 per cent to 2.1 per cent for 1999, significantly below the 2.9 per cent growth in 1998.