If the current recovery continues through February 2000, it will be the longest economic expansion in U.S. history, surpassing the 106-month expansion of the 1960s. The U.S. economy continued to grow above long-term historic rates marking the fourth consecutive year in which real GDP grew faster than 3.5 percent. Real consumption grew 5.1 percent, slightly faster than the 4.9 percent growth of 1998. While growing more slowly than 1998 s substantial 12.7 percent pace, business fixed investment still recorded strong 8.6 percent growth.
Forecasts are for calendar years.
In the light of growing inflationary pressures and more stable financial markets, the Federal Reserve raised the federal funds rate target 0.75 of a percentage point over the course of 1999. In so doing, the Fed fully reversed it s 0.75 of a percentage point reduction made during 1998 in response to instability in world financial markets. Estimated housing starts remained at a strong 1.66 million units. While remaining strong, these sectors appear to have shown some signs of slowing recently in response to rising interest rates. Increased equity values and rising home prices helped support strong consumption and investment growth.