There have been a number of favorable developments in this six and one-half year economic expansion.
None is more remarkable than the persistence of a low and stable rate of inflation.
And, the normal pattern in the shorter postwar cyclical expansions was always for inflation to rise. The core producer price index, excluding the food and energy components, has increased at only a 0.3 percent annual rate this year. In addition there are few signs of any buildup of inflationary pressures at earlier stages of processing. Most intermediate and crude materials prices have either fallen or risen only modestly. Consumer prices have risen at less than a 2 percent annual rate through the first nine months of this year, pulled down by declines in energy prices.