With increased uncertainty about the timing of future rate increases,[the bank] will be watching closely developments in household spending, oil markets, and global trade policy.”.
Overseas economic and financial developments In the United States, economic activity continued to expand firmly, with particular strength in household spending, while the rate of unemployment remained low.
On the U.S. economy, many members expressed the view that it continued to expand steadily, led mainly by household spending and business fixed investment, and was likely to keep expanding at a pace around its potential growth rate.
With regard to economic indicators related to household spending in the United States, retail sales, automobile sales, and housing starts recovered slightly in March from the previous month.
In the euro area, the economy seemed to be on a modest recovery trend, although many indicators were weak recently, for example those of household spending and production.
Many members expressed the view that the U.S. economy continued to expand, although at a slower pace, supported mainly by household spending and business fixed investment.
On the U.S. economy, many members said that it continued to expand steadily, led mainly by household spending and business fixed investment, and was likely to keep expanding at a pace around its potential growth rate.
For its estimates, the Bank took into account the impacts of the tax increase on household spending(private consumption and housing investment), business fixed investment.
In the United States, components of domestic private demand, such as household spending and business fixed investment, continue to increase, and the number of employees has been on an improving trend.
Many members raised the following as background: doubt about the sustainability of the firmness in household spending, which had been underpinned by the rise in housing prices; and possible negative effects of the rise in energy prices on the economy.
As a result, some parts of household spending that are sensitive to fluctuations in interest rates have underpinned the economy, for example, housing investment and automobile sales under sales promotion measures introduced late last year.
Having examined the increasing impact of interest rates and asset prices(particularly share prices and housing prices) on household expenditures, we go on to examine the"problems" of"low savings rates" and"excessive debt" that are often considered to be structural issues for US households..
On the U.S. economy, many members expressed the view that, although there were signs of deceleration, for example in housing sales, it continued to expand steadily, led mainly by household spending and business fixed investment, and was likely to keep expanding at a pace around its potential growth rate.
On the U.S. economy, many members expressed the view that, although there were signs of deceleration in housing sales, it continued to expand steadily, led mainly by household spending and business fixed investment, and was likely to keep expanding at a pace around its potential growth rate.
The question is whether these developments in household expenditure and industrial production will undermine the momentum of economic recovery, or in other words, whether the declining personal consumption and housing investment will affect other demand items such as business fixed investment, thereby placing further downside pressure on the economy.
These members said that, although the growth rate of real GDP for the October-December quarter decelerated slightly to 3.1 percent on an annualized quarter-on-quarter basis compared with that for the previous quarter, mainly due to an increase in imports of crude oil and consumer goods and weakness in exports to Asian economies, household spending and business fixed investment continued to increase and employment was on a steady improving trend.
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