and reduce employment throughout 2002. despite the reduction in business investment, significant improvements in efficiency allowed firms to meet their sales and production goals without having to add workers. these improvements seem to have been the result both of organizational changes in business operations and of innovations in the use of existing technologies, perhaps the result of firms applying more effectively the new technologies they had acquired at a rapid pace in the late 1990s. in 2003, the recovery took hold : the pace of consumer expenditures stepped up, and housing activity boomed. these developments were supported by a pickup in personal income growth as job losses abated and hourly compensation moved up, as well as by rising stock market and housing wealth. in addition, the caution and uncertainty that had weighed on businesses began to dissipate, and investment turned up in the spring. a marked increase in capital spending in the second half of last year was spurred by significantly improving profits, low interest rates, and investment tax incentives. nonetheless, the recovery remained “ jobless ” until the fall, when growth in private employment began to resume. output in the first quarter of this year continued to expand at the robust pace of 2003, and employment gains picked up sharply. however, economic activity hit a soft patch in the late spring : the growth of real gross domestic product slowed to an annual rate of 3 - 1 / 4 percent in the second quarter after posting a 4 - 1 / 2 percent average pace in the first quarter of this year and over the four quarters of 2003. the second - quarter slowing was particularly evident in consumption, which was nearly unchanged on average between april and june. furthermore, job gains in the private sector, which had averaged close to 300, 000 per month between march and may of this year, slowed to about 100, 000 per month on average during the summer. economic developments this year have undoubtedly been influenced by the steep run - up in oil prices from about $ 30 per barrel for west texas intermediate crude oil in december 2003 to a record level of $ 55 per barrel this past october. this rise in energy prices clearly has had a negative effect on the real purchasing power of households and has raised business costs. nevertheless, the united states is probably less vulnerable to this year ’ s oil price shock than it was to the shocks of the 1970s and early 1980s, both because energy represents a smaller share of household purchases and business input costs than in those earlier periods and because the higher oil prices reflect, in part, stronger growth in the rest of the world, which

low interest rates are not only driven by monetary policy – they are primarily the consequence of long - term structural trends, notably resulting from the page 2 of 6 change in the balance between a high level of savings and a fall in investment linked to an ageing population and the slowdown in productivity. the low interest rates thus reflect the historic low level of what economists refer to as the real natural rate of interest, r *, which has declined by around 2 percentage points over the last 15 years in both the euro area and the united states. furthermore, for the last several months, we have been experiencing an economic cooldown whose causes largely lie outside the euro area. according to the imf, heightened trade tensions are expected to shave up to 0. 8 % off global gdp in 2020, primarily due to mounting political uncertainty and a resulting decline in business confidence. at 3 % in 2019, global growth is expected to be at its lowest level since 2008 / 09. the euro area as a whole has been badly affected, principally due to the weight of germany, whose growth at best is expected to amount to 0. 5 % this year. our country is holding out far better with expected growth of 1. 3 % this year and the next. i would just like to add a few words about brexit : even with a withdrawal agreement, all aspects of a possible trade agreement and its financial services component will still have to be negotiated in 2020. the uncertainty surrounding brexit will therefore continue. our monitoring of the implementation of contingency plans, however, gives us confidence for the future of the french insurance industry : for our part, we are ready, for every scenario. given the context of prolonged uncertainty, we are compelled to pursue an accommodative monetary policy. it would go against all logic to raise interest rates now. when there are reasons for supporting demand, which is apparent in the excessively low inflation we see today, active monetary policies have to be maintained. this is the main reasoning behind the strengthening of our forward guidance, which we reasserted yesterday at the governing council. we now foresee that the ecb ’ s floor rate will remain at its current level of - 0. 5 % or lower, until there is a lasting convergence in the inflation outlook towards a rate that is sufficiently close to, but below, 2 %. the low interest rates, and even the negative interest rates, are nothing new : what page 3 of 6 is new is that