Economic Outlook April 1997 Click here for an index of Economic Outlook . Volatility is such a nuisance. The Dow Jones Industrial Average promptly dropped 140 points, took a recess for the Easter holiday, then returned Monday to fall 157 points more. Consumers believe we will go at least ten years without a recession. While the increased sale of houses and employment of workers appear beneficial to most Americans, the latest statistics are disquieting to the Federal Reserve, which, of course, worries that the expansion will create pressures on a tight labor market and on constrained capacity, which is one way to get inflation.
Volatility is such a nuisance.
Economic Stability Growth in the gross domestic product, inflation, and Treasury-bill rates are now less variable than they have been at any other time in the past two decades. The figures are remarkable. The rolling four-year volatility of nominal GDP, for example, has fluctuated between 0.5 percent and 1.0 percent for the past three years. It is now lower than at any other time since at least 1970. The same calculation for inflation and for commodity prices is also setting new marks.