balance with supply. the labor market has remained extremely tight, with the unemployment rate near a 50 - year low, job vacancies at historical highs, and wage growth elevated. over the past three months, employment rose by an average of 408, 000 jobs per month, down from the average pace seen earlier in the year but still robust. improvements in labor market conditions have been widespread, including for workers at the lower end of the wage distribution as well as for african americans and hispanics. a box in the june monetary policy report discusses developments in employment and earnings across all major demographic groups. labor demand is very strong, while labor supply remains subdued, with the labor force participation rate little changed since january. monetary policy the fed ’ s monetary policy actions are guided by our mandate to promote maximum employment and stable prices for the american people. my colleagues and i are acutely aware that high inflation imposes significant hardship, especially on those least able to meet the higher costs of essentials like food, housing, and transportation. we are highly attentive to the risks high inflation poses to both sides of our mandate, and we are strongly committed to returning inflation to our 2 percent objective. against the backdrop of the rapidly evolving economic environment, our policy has been adapting, and it will continue to do so. with inflation well above our longer - run goal of 2 - 3percent and an extremely tight labor market, we raised the target range for the federal funds rate at each of our past three meetings, resulting in a 1 - 1 / 2 percentage point increase in the target range so far this year. the committee reiterated that it anticipates that ongoing increases in the target range will be appropriate. in may, we announced plans for reducing the size of our balance sheet and, shortly thereafter, began the process of significantly reducing our securities holdings. financial conditions have been tightening since last fall and have now tightened significantly, reflecting both policy actions that we have already taken and anticipated actions. over coming months, we will be looking for compelling evidence that inflation is moving down, consistent with inflation returning to 2 percent. we anticipate that ongoing rate increases will be appropriate ; the pace of those changes will continue to depend on the incoming data and the evolving outlook for the economy. we will make our decisions meeting by meeting, and we will continue to communicate our thinking as clearly as possible. our overarching focus is using our tools to bring inflation back down to our 2 percent goal and to

import, signal a contraction of private investments even during the first three months of this year. the demand for monetary assets of private sector continues to be low, thus reflecting a deceleration of the economic activity. the annual pace of lending growth, excluding the exchange rate effect, for this sector slowed down onwards, at 4. 8 percent in march. business ’ demand for loans persists to be the sole lending increase source, whereas loan to households continues to shrink in annual terms, for the fifth consecutive month. during this period there are transmitted also the first signals on an easing of lending standards from banks, but this step is applied only on large - sized business. fiscal stimuli developed at more controlled paces in the first 4 - month period of year, providing a lower contribution on the economic activity during this period. fiscal policy has maintained an encouraging character, but at a lower rate relative to the same period of previous year. budget deficit amounted to all 5. 3 billion, contracted by 47 percent in annual terms. the low economic activity is reflected on the low growth by about 3 percent of budged revenues during the first 4 - month period of year. on the other side, budget expense recorded a reduction by about 2 percent from the rate recorded in the previous year. bank of albania continues to draw the attention that, notwithstanding the short - term positive effects the fiscal stimuli may generate ; the long - term stability of public sector should remain the main leader of fiscal policy. the lesson from the current problematic situation involving many european union countries, is the indispensability for consolidation of public finances and for that purpose the implementation of important correcting measures at quickest time, is a target of strategic importance. given the balancing of above stated developments, the accelerated growth of exports has provided a positive contribution on the total demand and on the economic growth. exports climbed by 45. 1 percent in annual terms, during the first quarter of 2010, whereas imports recorded an annual drop by about 2. 3 percent. accelerated upsurge of exports and the fall of imports at more moderate paces led to the contraction by about 17. 1 percent of trade deficit, pursuing the trend observed even during the second half of 2009. the ratio of imports covering from exports pointed to 35. 4 percent, about 11. 6 percentage points higher than in the previous year. the above stated developments in the foreign economy sector have established a more sustained balance of the supply and demand for foreign currency, thereby providing a higher stability of the domestic