today : what does “ normal ” monetary policy look like? before i go any further, i should note that what i have to say represents my own views and not necessarily those of the federal open market committee ( fomc ) or anyone else in the federal reserve system. strong, strong, strong my take on the economy is well summarized by the most recent fomc statement, in which we used variations on the word “ strong ” five times in only four short paragraphs. the statement references “ strong ” labor market conditions, “ strong ” job gains, and a “ strong ” rate of growth in economic activity, household spending and business fixed investment. 1 although this may suggest that we really need to consult a thesaurus, at least we can ’ t be accused of ambiguity. the fed has attained its dual mandate objectives of maximum employment and price stability 1 / 5 bis central bankers'speeches about as well as it ever has, with most indicators pointing to a very strong labor market indeed — including an unemployment rate below 4 percent — and an inflation rate very near our longer - run goal of 2 percent. with fiscal stimulus and favorable financial conditions providing tailwinds to the economy, the outlook is for more of the same. let me put some hard numbers to that : i expect real gdp to increase by 3 percent this year and by 2. 5 percent in 2019. this above - trend pace of growth should lead to continued solid job gains and further declines in unemployment. i expect the unemployment rate to fall slightly below 3. 5 percent next year, the lowest level in nearly 50 years. in keeping with the strong economy, i expect price inflation to edge up a bit above 2 percent, but don ’ t see any signs of greater inflationary pressures on the horizon. and, i continue to expect that further gradual increases in interest rates will best foster a sustained economic expansion and achievement of our dual mandate goals. i should hasten to add that not everyone has shared equally in this otherwise strong economy. the unevenness of the recovery is evident in my travels around the second district, where, for example, the economic recovery in upstate new york continues to lag the nation as a whole. so, while the national economy is in good shape, longer - run economic challenges have meant that not all americans have benefited from the improvement in the economy. beyond supporting a strong overall economy, monetary policy has limited reach into these issues, which are best addressed through other means, such as investments in education

finally getting healthier and that the fed is getting closer to achieving its dual mandate objectives of maximum sustainable employment and price stability. that would be very good news even if it were to cause a bump or two in financial markets. regional economic conditions let me now turn to economic conditions a bit closer to home. while upstate new york outperformed the nation during the great recession, it has now returned to its more typical pattern of modest growth. this is not unexpected as many regions in the northeast have tended to grow more slowly in recent decades as the population has shifted to other parts of the country and as jobs in the once dominant manufacturing industry have diminished. that being said, some parts of the region are really struggling : syracuse, utica, binghamton and elmira have all yet to see a meaningful recovery in employment, which is troubling. the capital region, on the other hand, is a true bright spot. while upstate new york as a whole has gained back only a little more than half of the jobs lost during the great recession, albany is close to regaining all of the jobs that were lost. though the capital region ’ s public sector has exerted some downward pressure on job growth during the recovery, the education and health care sectors have been an ongoing source of stability and strength for the region. employment in the education sector has climbed nearly 25 percent since the end of the recession, an increase of around 5, 000 jobs, and the health care sector has added about 3, 000 jobs. and there ’ s some especially good news to report from the capital region ’ s manufacturing sector : jobs are growing, and growing quite strongly – a testament to the success of the area ’ s burgeoning high tech sector. since the recovery began, the area has added over 4, 000 manufacturing jobs, many of which are tied to computers and electronics. that ’ s an increase of nearly 25 percent. this pace of job growth is four times as great as the national pace. in fact, there are now more people employed in the capital region ’ s manufacturing sector than before the recession. not many places can say that, and this is certainly not true for the nation as a whole. in part, the success of local manufacturing reflects the presence of strong partnerships between industry and higher education. these cooperative arrangements, which help in the creation, development and commercialization of new products and processes, drive innovation and put local companies at the leading edge of technology. moreover, these partnerships directly support local