to rise at a solid pace. continued softness in consumer spending and weaker housing activity early in the second quarter also suggest less momentum in economic activity so far this year. payroll employment continued to rise at a solid pace in april and may, though slightly slower than in the first quarter, partly reflecting increased immigrant labor supply. despite some further rebalancing between supply and demand, the labor market remains tight. the unemployment rate edged up to 4. 0 percent in may, while the 1 / 7 bis - central bankers'speeches number of job openings relative to unemployed workers declined further to near its prepandemic level. labor force participation dropped back to 62. 5 percent in may, which suggests no further improvement in labor supply along this margin, as labor force participation among those aged 55 and older has been persistently low. at its current setting, our monetary policy stance appears to be restrictive, and i will continue to monitor the incoming data to assess whether monetary policy is sufficiently restrictive to bring inflation down to our target. as i've noted recently, my baseline outlook continues to be that inflation will decline further with the policy rate held steady. and should the incoming data indicate that inflation is moving sustainably toward our 2 percent goal, it will eventually become appropriate to gradually lower the target range for the federal funds rate to prevent monetary policy from becoming overly restrictive. however, we are still not yet at the point where it is appropriate to lower the policy rate, and i continue to see a number of upside risks to inflation. first, much of the progress on inflation last year was due to supply - side improvements, including easing of supply chain constraints ; increases in the number of available workers, due in part to immigration ; and lower energy prices. it is unlikely that further improvements along this margin will continue to lower inflation going forward as supply chains have largely normalized ; the labor force participation rate has leveled off in recent months below pre - pandemic levels ; and an open u. s. immigration policy over the past few years, which added millions of new immigrants in the u. s., may become more restrictive. geopolitical developments could also pose upside risks to inflation, including the risk that spillovers from regional conflicts could disrupt global supply chains, putting additional upward pressure on food, energy, and commodity prices. there is also the risk that the loosening in financial conditions since late last year, reflecting considerable gains in equity valuations, and additional fiscal stimulus could add momentum to demand,

are estimated to have contributed both to the increase in the structural level of exports and to their geographical diversification towards markets with greater growth potential, thereby resulting in a favourable market - share performance. at the same time, imports have been seen to be flatter in relation to the rise in final demand, despite the momentum of exports in firms and sectors with a high import content. that likewise points to an improvement in the competitiveness of the resident productive sector compared with foreign competitors. the pick - up in our competitive capacity is highly tangible in terms of spain ’ s unit labour costs relative to those of the rest of the euro area. these costs fell by 14 % between 2008 and 2019, after rising forcefully during the pre - crisis years. the gains in competitiveness vis2 / 6 a - vis the euro area were reflected, in the early stages of the crisis, in heavy job destruction, and throughout the subsequent period, in wage moderation. contributing to this were the successive amendments to the labour market legal framework during the crisis, which proved to be effective levers for boosting the recovery in employment. overall, these developments enabled the competitiveness lost in relation to the other euro area countries – measured via relative unit labour costs ( ulcs ) – to be restored. specifically, while for the market economy as a whole ulcs growth in spain from 1999 to 2008 exceeded that observed in the euro area by 16 pp, the current relative level is 5 pp below that of 1999. we must add to these improvements the enhanced financing conditions for resident agents as a whole. included among these agents are spanish firms which, from end - 2012, saw their financial costs ease strongly. also, most particularly, there was a correction to the differences in the interest rates they had previously to pay compared with their competitors in the core euro area countries. in this setting, the ecb ’ s clearly expansionary monetary policy stance, the institutional reforms to the financial governance of the eu, and the cleanup and restructuring of the national financial sector were all pivotal in significantly reducing the degree of financial fragmentation in the euro area between 2010 and 2012. deleveraging by the non - financial private sector has also notably influenced competitiveness. this ongoing process is very advanced both in the case of non - financial corporations and of households. in the case of companies, for instance, the debt / gdp ratio has fallen by more than 40 pp from its peak, meaning it now stands below the average for euro area firms. this has all contributed