and favorable forecast error would not change the conclusion that slack will likely remain substantial for quite some time. some observers question just how large the shortfall from full employment really is and hence worry that further increases in aggregate demand could push up inflation. their concern is that a large part of the rise in unemployment since 2007 is structural rather than cyclical. i agree that the magnitude of structural unemployment is uncertain, but i read the evidence as supporting the view that the bulk of the rise in unemployment that we saw in recent years was cyclical, not structural in nature. assessments concerning the degree of slack in the labor market are highly relevant to an evaluation of the appropriate stance of policy, so i ’ d like to review my reasoning in some detail. first, the fact that the rise in unemployment was quite widespread across industry and occupation groups casts doubt on the hypothesis that there has been an unusually large mismatch between the types of job vacancies and the types of workers available to fill them. certainly, job losses in the construction sector and in financial services were particularly sharp – not surprising given the collapse in the housing market and in the financial sector that we saw in 2008 – but so were losses in manufacturing and other highly cyclical industries that typically are hit especially hard in recessions. indeed, measures of the dispersion of employment changes across industries did not increase more than past experience would have predicted given the depth of the recession. some commentators have noted that “ house lock ” – the reluctance or inability of homeowners to sell in a declining price environment or when underwater on their mortgages – may be preventing people from moving to find available jobs in new locations. however, evidence from migration patterns suggests that house lock is not having a significant effect the blue chip survey provides forecasts on a quarterly basis only through the end of 2013. to construct quarterly forecasts for 2014, we interpolate the annual projections reported in the march survey. according to the april edition of the blue chip survey, which was released yesterday, " the consensus outlook for u. s. economic growth this year and next underwent minimal change over the past month. " the forecast confidence interval is generated using stochastic simulations of the federal reserve staff's frb / us model. specifically, a baseline is constructed centered on the midpoint of the central tendency of the fomc's projections released in january, and then the model is repeatedly simulated with shocks drawn randomly for the set of historical disturbances experienced over the period

and stated that, while the case for an increase in the target range had strengthened, it would, for the time being, wait for further evidence of continued progress toward its objectives. at our meeting earlier this month, the committee judged that the case for an increase in the target range had continued to strengthen and that such an increase could well become appropriate relatively soon if incoming data provide some further evidence of continued progress toward the committee ’ s objectives. this judgment recognized that progress in the labor market has continued and that economic activity has picked up from the modest pace seen in the first half of this year. and inflation, while still below the committee ’ s 2 percent objective, has increased somewhat since earlier this year. furthermore, the committee judged that near - term risks to the outlook were roughly balanced. waiting for further evidence does not reflect a lack of confidence in the economy. rather, with the unemployment rate remaining steady this year despite above - trend job gains, and with inflation continuing to run below its target, the committee judged that there was somewhat more room for the labor market to improve on a sustainable basis than the committee had anticipated at the beginning of the year. nonetheless, the committee must remain forward looking in setting monetary policy. were the fomc to delay increases in the federal funds rate for too long, it could end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting both of the committee ’ s longer - run policy goals. moreover, holding the federal funds rate at its current level for too long could also encourage excessive risk - taking and ultimately undermine financial stability. the fomc continues to expect that the evolution of the economy will warrant only gradual increases in the federal funds rate over time to achieve and maintain maximum employment and price stability. this assessment is based on the view that the neutral federal funds rate — meaning the rate that is neither expansionary nor contractionary and keeps the economy operating on an even keel — appears to be currently quite low by historical standards. consistent with this view, growth in aggregate spending has been moderate in recent years despite support from the low level of the federal funds rate and the federal reserve ’ s large holdings of longerterm securities. with the federal funds rate currently only somewhat below estimates of the neutral rate, the stance of monetary policy is likely moderately accommodative, which is appropriate to foster further progress toward the fomc ’ s objectives. but because monetary policy is only moderately accommodative, the risk of