Outlook for the economy

We expect overall job growth to slow during the next six to nine months, as the declines in home sales and residential construction ripple through the broader economy. Rising mortgage rates and higher energy costs will also cut into discretionary income, causing consumers to cut back.

But even with all the challenges we see today, spending will still increase. The rise will simply be less than we have seen in recent years. Real personal consumption expenditures should average a 2.2 percent pace over the next three quarters.