of people employed keeps increasing and has increased by more than 11 million since mid - 2013. the more domestically - oriented services and construction sectors also continue to hold up well. yet, global factors weigh on euro area growth. 1 / 4 bis central bankers'speeches to be sure, there are tentative signs of stabilisation. forward - looking indicators have become in slightly more optimistic, as the purchasing managers ’ index on manufacturing business expectations in 12 months ’ time have increased in the five consecutive months through january to the highest level in 18 month. moreover, while uncertainties surrounding the global economic environment remain elevated, those related to trade tensions between the united states and china are receding. other risks, however, are still lingering or – as for the uncertainty surrounding the impact of the coronavirus – are a renewed source of concern. the overall moderate growth performance is delaying the pass - through from wage increases to prices and inflation developments remain subdued. inflation measured by the ( flash ) harmonised index of consumer prices stood at 1. 4 % in january, in line with our expectations. the euro area economy therefore continues to require support from our monetary policy, which provides a shield from global headwinds. we see that our policy stimulus is being passed on to the financing conditions most relevant for the real economy. according to latest data, lending rates for businesses are almost 10 basis points lower than they were one year ago, and for households for house purchases they are almost 40 basis points lower and close to their historical lows. these favourable financing conditions in turn continue to support business investment and consumer and construction spending in the euro area, partially offsetting the negative impact from sluggish developments in global demand. at the same time, we continue to closely monitor the potential side effects of our measures. low interest rates bring a lot of benefits to the euro area economy. that being said, low funding costs appear to have also encouraged more borrowing by highly leveraged firms and greater risk - taking by non - banks, such as investment funds, insurance companies and pension funds. in addition, property markets in a number of euro area countries have seen persistently rising prices, although the low interest rate environment is only one among many factors influencing the choice to borrow for house purchase. in this environment, authorities should continue to use targeted macroprudential measures to address the associated risks to financial stability. at the same time, fiscal and structural policies also have an important role to play in a low interest rate environment. they can

product of individual states in the united states are smoothed, with about 40 percent smoothed by insurance or cross - ownership of assets, a quarter smoothed by borrowing or lending, and one - eighth smoothed by the federal transfers and grants. in other words, the contribution of markets is five times higher than the contribution of fiscal tools. 2 regions within federations in europe exhibit high levels of risk - sharing, too. for example, in pre - unification germany, see obstfeld, m. and k. rogoff, “ foundations of international macroeconomics ”, harvard university press, 1996. asdrubali, p., b. sorensen and o. yosha, “ channels of interstate risk sharing : united states 1963 – 1990 ”, quarterly journal of economics, vol. 111, 1996, pp. 1081 – 1110 ; athanasoulis, s. and e. van wincoop, “ risk sharing within the united states : what do financial markets and fiscal federalism accomplish? ”, review of economics and statistics, vol. 83, 2001, pp. 688 – 698. see also del negro, m., “ asymmetric shocks among us states ”, journal of international economics, vol. 56 ( 2 ), march 2002, pp. 273 – 297. bis central bankers ’ speeches virtually all shocks to per capita state gross product were smoothed. however, due to less developed capital markets than in the united states, the largest portion – 50 percent – was smoothed through the federal tax transfer and grant system, and 36 percent were smoothed through financial markets. 3 for countries in a monetary union such as the euro area, risk - sharing is particularly important because the single monetary policy is unable to address asymmetric shocks. with disjoint business cycles across countries, idiosyncratic shocks to emu member states need to be insured through robust market or fiscal mechanisms. reducing the volatility of aggregate consumption through various risk - sharing mechanisms can provide significant welfare gains for countries hit by specific shocks. and, by reducing internal divergences and facilitating macroeconomic adjustment, risk - sharing can be beneficial for the monetary union as a whole. at this point it is quite clear that, in the foreseeable future, a number of mechanisms that have the potential to improve risk - sharing across countries will not progress quickly in europe. for example, labour mobility will likely remain below levels achieved in commonlanguage federations such as