which is based on the trilogy of an inflation target, an independent central bank and a floating exchange rate. an important factor behind our good growth and low inflation has been our productivity performance. here, if we use the simplest measure of productivity, which is labour productivity, the pattern in australia is very similar to the pattern in the united states ( graph 1 ) : strong growth in the 1960s, a flattening out in the 1970s and 1980s, followed by a pick - up in growth in the 1990s. but the pick - up in the 1990s in australia has been more pronounced than in the united states. we have gone from growth of 1. 7 % per annum to 3. 0 % per annum, whereas the united states went from growth of 1. 5 er cent per annum to 2 % per annum. i do not want to suggest that this means we have higher productivity than the united states ; remember we are only talking here about rates of change of productivity. the fact that we have been able to speed up more than they have is, in large part, because we were starting from a lower base. incidentally, the oecd recently completed a study called “ is there a new economy? ” in which it looked at similar calculations to the ones i have shown above for a range of countries. it found that out of the 29 oecd economies, only six had achieved a higher trend growth of gdp per capita in the 1990s compared with the 1980s. they were the united states, australia, ireland, denmark, norway and the netherlands. table 1 real gdp growth and consumer price inflation average annual rate ( since 1990 ) country gdp country gdi ireland 6. 3 japan 1. 0 australia 3. 5 france 1. 8 norway 3. 3 new zealand 1. 9 united states 3. 3 switzerland 2. 1 netherlands 2. 9 denmark 2. 1 new zealand 2. 6 finland 2. 1 canada 2. 5 canada 2. 2 spain 2. 5 belgium 2. 3 germany 2. 2 australia 2. 3 belgium 2. 2 netherlands 2. 5 denmark 2. 1 norway 2. 5 united kingdom 2. 1 germany 2. 5 finland 1. 8 ireland 2. 6 france 1. 7 sweden 2. 9 japan 1. 5 united states 3. 0 italy 1. 5 united kingdom 3. 5 sweden 1. 4 italy 3. 8 sweden 1. 0 spain 4. 0 source : oecd whilst i am on the subject of productivity, i want to make

financial conditions continue to strengthen, thus reducing an important headwind for the economy. to be sure, significant restraints on the pace of the recovery remain, including weakness in both residential and nonresidential construction and the poor fiscal condition of many state and local governments. sales of new and existing homes dropped back in january and february, and the pace of new single - family housing starts has changed little since the middle of last year. outlays for nonresidential construction continue to contract amid rising vacancy rates, falling property prices, and difficulties in obtaining financing. pressures on state and local budgets, though tempered by ongoing federal support, have led to continuing declines in employment and construction spending by state and local governments. as you know, the labor market was particularly hard hit by the recession. recently, we have seen some encouraging signs that layoffs are slowing and that employment has turned up. manufacturing employment increased for a third month in march, and the number of temporary jobs – often a precursor of more permanent employment – has been rising since last october. new claims for unemployment insurance continue on a generally downward trend. however, if the pace of recovery is moderate, as i expect, a significant amount of time will be required to restore the 8 – 1 / 2 million jobs that were lost during the past two years. i am particularly concerned about the fact that, in march, 44 percent of the unemployed had been without a job for six months or more. long periods without work erode individuals ’ skills and hurt future employment prospects. younger workers may be particularly adversely affected if a weak labor market prevents them from finding a first job or from gaining important work experience. on the inflation front, recent data continue to show a subdued rate of increase in consumer prices. for the three months ended in february, prices for personal consumption expenditures rose at an annual rate of 1 – 1 / 4 percent despite a further steep run - up in energy prices ; core inflation, which excludes prices of food and energy, slowed to an annual rate of 1 / 2 percent. the moderation in inflation has been broadly based, affecting most categories of goods and services with the principal exception of some globally traded commodities and materials, including crude oil. long - run inflation expectations appear stable ; for example, expected inflation over the next 5 to 10 years, as measured by the thomson reuters / university of michigan surveys of consumers was 2 – 3 / 4 percent in march, which is at the lower end of the narrow range that has