contrast, employment in the manufacturing sector and the federal government declined a combined 20, 000 per month. and the resulting uncertainty is, i believe, an important contributing factor behind the relatively sluggish pace of business investment spending. my best guess is that growth for all of 2013, measured on a q4 / q4 basis, will be about what it has been since the end of the recession. but i believe a strong case can be made that the pace of growth will pick up notably in 2014. the private sector of the economy should continue to heal, while the amount of fiscal drag will begin to subside. i also see some indications that growth prospects among our major trading partners have begun to improve ; for example, the rise in the june euro area composite purchasing managers ’ index. and this combination of events is likely to create an environment in which business investment spending will gather strength. finally, i believe this tug - of - war analogy is useful in explaining the recent inflation dynamics. as is well known, total inflation, as measured by the personal consumption expenditures ( pce ) deflator, has slowed sharply over the past year and is now running below the fomc ’ s expressed goal of 2 percent. much of the slowing of total inflation is due to declining energy prices resulting from the weakening of global growth mentioned earlier combined with increased energy production here in the u. s. however, it is also the case that core inflation, that is, excluding food and energy, has slowed sharply as well. a decomposition of the slowing in core inflation reveals that some of it is due to slowing in the rate of increase in prices of non - food and non - energy goods. this probably is due in large part to the softening of global demand for goods and the modest appreciation of the dollar that has occurred since mid - 2011. in the service sector, the rate of increase in prices of medical services and “ non - market ” services – the latter includes some financial services – also has slowed notably recently. in contrast, the rate of increase in prices for other non - energy services has been relatively stable. comparing this set of conditions to that in 2010, the recent slowing of inflation has been less widespread across core goods and core services, and inflation expectations so far have declined less appreciably than they did in 2010. thus, my best guess is that core goods prices will begin to firm in the months ahead as global demand begins to strengthen and inventories get into better alignment with

sales. corelogic report shows home prices rise by 12. 1 percent year over year in april. bis central bankers ’ speeches as is always the case, there is substantial uncertainty surrounding this forecast. moreover, there is always the possibility of some unforeseen shock. thus, we will be monitoring u. s. and global economic conditions very carefully and will adjust our views on the likely path for growth, inflation and the unemployment rate accordingly in response to new information. at its meeting last week, the fomc decided to continue its accommodative policy stance. it reaffirmed its expectation that the current low range for the federal funds rate target will be appropriate at least as long as the unemployment rate remains above 6. 5 percent, so long as inflation and inflation expectations remain well - behaved. it is important to remember that these conditions are thresholds, not triggers. the fomc also maintained its purchases of $ 40 billion per month in agency mbs and $ 45 billion per month in treasury securities, with a stated goal of promoting a substantial improvement in the labor market outlook in a context of price stability. in its statement, the fomc said that it may vary the pace of purchases as economic conditions evolve. as chairman bernanke stated in his press conference following the fomc meeting, if the economic data over the next year turn out to be broadly consistent with the outlooks that the fomc sees as most likely, which are roughly similar to the outlook i have already laid out, the fomc anticipates that it would be appropriate to begin to moderate the pace of purchases later this year. under such a scenario, subsequent reductions might occur in measured steps through the first half of next year, and an end to purchases around mid2014. under this scenario, at the time that asset purchases came to an end, the unemployment rate likely would be near 7 percent and the economy ’ s momentum strengthening, supporting further robust job gains in the future. here, a few points deserve emphasis. first, the fomc ’ s policy depends on the progress we make towards our objectives. this means that the policy – including the pace of asset purchases – depends on the outlook rather than the calendar. the scenario i outlined above is only that – one possible outcome. economic circumstances could diverge significantly from the fomc ’ s expectations. if labor market conditions and the economy ’ s growth momentum were to be less favorable than in the f