https : / / www. federalreserve. gov / releases / z1. - 5reduced the extent of scarring during the pandemic, which should aid the pace of hiring at inperson services establishments once the virus is well controlled. the speed of further improvement in the labor market following the initial rush of reopening is less clear, however. some employers may be cautious about significantly increasing payrolls before post - covid consumption patterns are more firmly established. others may be implementing measures to stay lean and contain costs. in the december duke cfo survey, roughly one - half of cfos from large firms and about one - third of those from small firms reported “ using, or planning to use, automation or technology to reduce reliance on labor. ” 8 in addition to greater use of technology, there is likely a significant amount of slack on the participation and part - time margins. the epop ratio among workers ages 25 to 54 is still a full 4 percentage points below its pre - covid level, and the number of workers working part time because they cannot find a full - time job is 1. 7 million higher than pre - covid. although core and headline pce inflation came in at 1. 5 percent on a 12 - month basis in january, the well - anticipated base effects from price declines in march and april of last year will cause inflation to move above 2 percent in april and may. it also seems likely that a surge of demand may be met by some transitory supply bottlenecks amid a rapid reopening of the economy, leading pce inflation to rise somewhat above 2 percent on a transitory basis by the end of 2021. entrenched inflation dynamics are likely to take over following the transitory pressures associated with reopening. underlying trend inflation has been running persistently below 2 details on the cfo survey, which is a partnership of duke university, the federal reserve bank of richmond, and the federal reserve bank of atlanta, can be found on the richmond fed ’ s website at https : / / www. richmondfed. org / research / national _ economy / cfo _ survey. - 6percent for many years. 9 in addition, research suggests that although increasing labor market tightness may show through to wage inflation, the pass - through to price inflation has become highly attenuated. 10 these results suggest that businesses tend to respond to increased labor costs by reducing margins rather than increasing prices later in the cycle

as well as by the progress made with fiscal consolidation and structural reforms. moreover, the low level of the price of oil should continue to support households ’ real disposable income and corporate profitability and, therefore, private consumption and investment. furthermore, demand for euro area exports should benefit from improvements in price competitiveness. however, economic growth in the euro area is likely to continue to be dampened by the necessary balance sheet adjustments in a number of sectors and the sluggish pace of implementation of structural reforms. this assessment is also broadly reflected in the june 2015 eurosystem staff macroeconomic projections for the euro area, which foresee annual real gdp increasing by 1. 5 % in 2015, 1. 9 % in 2016 and 2. 0 % in 2017. compared with the march 2015 ecb staff macroeconomic projections, the projections for real gdp growth over the projection horizon remain virtually unchanged. while remaining on the downside, the risks surrounding the economic outlook for the euro area have become more balanced on account of our monetary policy decisions and oil price and exchange rate developments. bis central bankers ’ speeches inflation bottomed out at the beginning of the year. according to eurostat ’ s flash estimate, euro area annual hicp inflation was 0. 3 % in may 2015, up from 0. 0 % in april and compared with – 0. 6 % in january. on the basis of the information available and current oil futures prices, annual hicp inflation is expected to remain low in the months ahead and to rise towards the end of the year, also on account of base effects associated with the fall in oil prices in late 2014. supported by the expected economic recovery, the impact of the lower euro exchange rate and the assumption embedded in oil futures markets of somewhat higher oil prices in the years ahead, inflation rates are expected to pick up further during 2016 and 2017. this assessment is also broadly reflected in the june 2015 eurosystem staff macroeconomic projections for the euro area, which foresee annual hicp inflation at 0. 3 % in 2015, 1. 5 % in 2016 and 1. 8 % in 2017. in comparison with the march 2015 ecb staff macroeconomic projections, the inflation projections have been revised upwards for 2015 and remain unchanged for 2016 and 2017. the governing council will continue to monitor closely the risks to the outlook for price developments over the medium term. in this context, we will focus in particular on the passthrough of our monetary policy measures, as well