in recent months it has shown signs of stabilizing, but remains well below the fomc ’ s expressed goal of 2 percent for total inflation. fortunately, inflation expectations remain relatively stable at levels somewhat above the current inflation rate. this stability should help prevent an undesirable further drop in inflation relative to our 2 percent objective. that said, there are some nascent signs that the economy may be doing better. for example, based on the first estimate, which is subject to revision, real gdp increased at a 2. 8 percent annual rate in the third quarter of 2013, above the trend of the past four years. and the most recent payroll employment report showed a pickup in the monthly pace of job gains. the 3 - month moving average rose back above a 200, 000 pace after slowing to about 150, 000 as of july of this year. i hope that this marks a turning point for the economy. but before we rush to this conclusion, a few more cautionary comments are appropriate. with respect to gdp growth, it turns out that inventory investment contributed ¾ of a percentage point to that overall growth rate. thus, because this impetus from inventories will bis central bankers ’ speeches likely reverse this quarter, the real gdp growth rate is likely to slow to around a 2 percent annual rate or a bit less in the fourth quarter. with respect to payroll employment, we have seen such bursts in payroll growth before over the past few years and have been disappointed when the pickups proved temporary and did not lead to a rise in the overall growth rate. but, i have to admit that i am getting more hopeful. not only do we have some better data in hand, but also the fiscal drag, which has been holding the economy back, is likely to abate considerably over the next few years at the same time that the fundamental underpinnings of the economy are improving. the first thing to note is that federal fiscal policy in 2013 has been unusually contractionary. at the beginning of the year the payroll tax cut expired while tax rates on higher income households were raised, a series of taxes associated with the affordable care act took effect, and spending was reduced due to the sequester and the gradual winding down of foreign military operations. according to the congressional budget office, the cyclicallyadjusted or full - employment budget balance increased by roughly 1 ¾ percentage points of gdp in fiscal year 2013. over the past 50 years there have been only two other episodes of fiscal contraction of

landscape the important role of post - secondary education is undeniable given the key role that human capital plays in economic growth. however, the higher education landscape comprises different types of post - secondary institutions that provide different educational experiences. one such group of institutions – private for - profit institutions – have progressively become more visible in the u. s. higher education market. for - profit institutions and their growth in the market for student loans and federal need - based aid is the subject of the special topic in today ’ s briefing. analysis done here at the new york fed reveals that enrollment in for - profit colleges showed explosive growth nationally during, and for some time after, the great recession. interestingly, this growth in enrollment has leveled off perceptibly as the economic recovery has taken hold. these patterns suggest that workers who were displaced from their jobs during the great recession chose to enroll in two - year and less - than - two - year colleges, mostly in for - profits but also in public community colleges. now, with improved labor market conditions, individuals have less reason to get a short - term degree or may have returned to the labor force. stark patterns are also observed in the market for student loans. both the incidence of student loans and average loan size are by far greater in for - profit institutions than in comparable public colleges. given the importance of post - secondary education in our nation ’ s future, and the key role that human capital plays in our nation ’ s growth, we at the bis central bankers ’ speeches new york fed will continue to analyze the growth of the private for - profits in particular, and post - secondary institutions in general, in our region and the nation. i will now ask jaison abel to discuss economic conditions in our region. bis central bankers ’ speeches