The outlook for U.S. real GDP growth has improved over the past three months on some stronger-than-expected data in January and February.
Although CPI inflation increased by more than expected in January, inflation continues to slow modestly on a year-to-year basis since peaking at 8.9% in June 2022.
The Federal Reserve has signaled that its target range for the federal funds rate―currently 4.5% to 4.75%―is likely to surpass 5% this year.
The demand for labor remains strong. Job growth accelerated sharply in January, and the unemployment rate fell to a nearly 54-year low of 3.4%.