##6 measure, for example, captures unemployment, underemployment ( meaning workers who would like to work more hours ) and marginal attachment, namely those workers who are not competing very actively in the labour market, for example because they are not available to start a new job at short notice. 4 see the box entitled “ assessing labour market slack ”, economic bulletin, issue 3, ecb, 2017. parallel shifts of the phillips curve could arise from the impacts of cost - push shocks or from a de - anchoring of inflation expectations, with different implications for monetary policy. external and domestic cost - push shocks could have led to a downward shift in the phillips curve of the euro area. over recent years the global economy has experienced negative price shocks in energy markets, which have tended to push up output while containing inflation in the euro area. if, however, shifts in the phillips curve are the result of a de - anchoring of inflation expectations, they raise significant concerns over the ability of the central bank to achieve its inflation objective. while there were signs of de - anchoring appearing in 2014, our monetary policy measures have been successful in stabilising inflation expectations and making deflation risks vanish. our primary task as a central bank is to ensure that the traditional relationship between the real and the nominal sides of the economy reasserts itself at a steady - state rate of inflation that is below, but close to, 2 %. in summary, there appears to have been a disconnect between growth and inflation. however, the ongoing economic expansion is expected to further contribute to a narrowing of the output and unemployment gaps, whatever their current levels. as slack in the economy continues to be absorbed, price pressures will gradually build up and the traditional phillips curve relationship between inflation and the business cycle should eventually reassert itself. the disconnect between output growth and inflation is not the only type of disconnect that we have to contend with. if past regularities were a guide, the substantial easing of financing conditions prompted by our policy measures could have been expected to boost spending and inflation more forcefully across advanced economies we have indeed witnessed a ubiquitous downward trend in real interest rates. in the euro area, lately they have been around – 1. 5 % at short maturities and around – 0. 5 % in the ten - year maturity segment. both figures are around 1. 5 percentage points lower than their corresponding averages over the first ten years of economic and monetary union ( emu ).

peter praet : economic developments in the euro area remarks by mr peter praet, member of the executive board of the european central bank, at the european finance forum, frankfurt, 9 april 2018. * * * i would like to thank claus brand, maarten dossche and john hutchinson for their support in preparing this speech. the economic expansion clearly shows that our monetary policy has been effective in laying the groundwork for a return of inflation to a rate below, but close to, 2 % over the medium term. inflation developments remain subdued, however, and we have not yet met the governing council ’ s criteria for a sustained adjustment in the path of inflation, which is our stated condition for ceasing our net asset purchases. overall, an ample degree of monetary stimulus remains necessary for underlying inflation pressures to continue to build up and support headline inflation developments over the medium term. real gdp has expanded for 19 consecutive quarters. it grew by 2. 7 % year on year in the fourth quarter of 2017, according to preliminary data. this is well above the latest potential growth estimates of around 1. 5 %. 1 see, for example, the european commission ’ s “ european economic forecast – autumn 2017 ”. potential growth was estimated at 1. 4 % for 2017 and 1. 5 % for 2018 and 2019. the latest economic data and survey results point towards some moderation of late, but remain consistent with strong growth for the first quarter of this year. the composite output purchasing managers ’ index – which is closely correlated with growth in the euro area – remains above its long - term average and is close to a 12 - year high. moreover, eurostat ’ s economic sentiment indicator is around its highest level for 17 years. while risks to growth can be assessed as being broadly balanced, the international trade environment may have added to the downside. this is also reflected in financial conditions, which have recently tightened while remaining very supportive. the ongoing expansion has led to strong employment gains. the number of people employed in the euro area has increased by almost 7. 8 million since the trough in mid - 2013. this implies that all of the job losses recorded during the crisis have been recovered. the unemployment rate is at its lowest level since december 2008, despite an increase in the labour force of more than 2 %. consumer spending is being driven by steady growth in households ’ real disposable income, favourable bank lending conditions and the notable progress achieved in deleveraging. since