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“Assessing the Balance of Risks in the Economy” Remarks to the Greater Boston Chamber of Commerce Susan M. Collins President & Chief Executive Officer Federal Reserve Bank of Boston October 14, 2025 Figure 1 | Real GDP Growth 5 4 Percent 3 2 1 0 -1 2022 Year-over-year 2023 2024 Two-Quarter (Annualized) Source: Bureau of Economic Analysis / Haver Analytics. Federal Reserve Bank of Boston | bostonfed.org 2 Figure 2 | Labor Market Indicators B. Unemployment Rate & UI Claims A: Payroll Employment Thousands (four-week moving average) 700 600 500 400 300 200 100 0 2017 2018 2019 2020 2021 2022 2023 2024 2025 400 5.5 350 5.0 300 4.5 250 4.0 200 3.5 150 Percent of labor force Thousands (three-month average change) 800 3.0 2017 2018 2019 2020 Total Nonfarm Payroll Employment Initial Claims (left scale) NBER-dated recession NBER-Dated Recession 2021 2022 2023 2024 2025 Unemployment Rate (right scale) Notes: The pandemic era periods are removed for clarity. For Panel A this is March 2020 - December 2020 and for Panel B mid-March 2020 - July 2021. Claims data are at a weekly frequency through October 4. Last two weeks of initial claims data are constructed by summing state-level claims data. These data are then seasonally adjusted using the Department of Labor's published seasonal factors. Source: Department of Labor / Bureau of Labor Statistics / Haver Analytics. Federal Reserve Bank of Boston | bostonfed.org 3 Figure 3 | Labor Productivity in the Nonfinancial Corporate Sector 125 120 2.6% Index: 2017=100 115 1.2% 110 105 100 95 90 85 2006 2008 Real Output per Hour 2010 2012 2014 2016 Average Annualized Growth (2006:Q1-2019:Q4) 2018 2020 2022 2024 Average Annualized Growth (2020:Q1-2025:Q2) NBER-dated recession Source: Bureau of Labor Statistics, Author's Calculations / Haver Analytics. Federal Reserve Bank of Boston | bostonfed.org 4 Figure 4 | Core Personal Consumption Expenditures (PCE) Prices B: Housing C: Core Services Ex. Housing 12 12 10 10 8 8 6 6 4 4 2 2 0 0 -2 -2 -4 -4 -6 2019 2020 2021 2022 2023 2024 2025 12-Month Change 2019 2020 2021 3-Month Change (annual rate) 2022 2023 2024 2025 2019 2020 2021 2022 2023 2024 2025 Percent Percent A: Core Goods -6 NBER-dated recession Note: Dashed lines represent average 12-month growth of PCE prices in the specified category from 2001 to 2007, a period when 12-month core PCE inflation averaged 2%. Source: Bureau of Economic Analysis / Haver Analytics. Federal Reserve Bank of Boston | bostonfed.org 5 Excess price growth (percentage points) Figure 6 Video, audio, photographic & information processing equipment Recreational items Garments Food & nonalcoholic beverages purchased for off-premises consumption New motor vehicles Pharmaceutical & other medical products Motor vehicle fuels, lubricants & fluids Estimated tariff impact (percent) Note: Excess price growth is defined as the category-specific price change from January 2025 through August 2025 less the average price change within that category calculated over January 2000 through December 2017. Sources: Barbiero and Stein (2025); Bureau of Economic Analysis Federal Reserve Bank of Boston | bostonfed.org 6 Figure 6 | Inflation Expectations B. Longer-Term Inflation Expectations 7 7 6 6 5 5 Percent Percent A. Short-Term Inflation Expectations 4 4 3 3 2 2 1 1 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2007 2009 2011 2013 2015 2017 2019 2021 2023 1-Year Michigan Survey (Household Median) 5-10 Year, Michigan Survey (Household Median) 1-Year NY Fed Survey (Household Median) 5-10 Year, TIPS Inflation Compensation (Market-Based) 1-Year Survey of Professional Forecasters (Median) NBER-dated recession 2025 NBER-dated recession Source: Federal Reserve Bank of New York, Federal Reserve Bank of Philadelphia, Federal Reserve Board of Governors, University of Michigan / Haver Analytics. Federal Reserve Bank of Boston | bostonfed.org 7 Figure 7: Some of Our Work in New England & the Nation Payments Innovation & Financial Services Nonpartisan Empirical Research “Working Places” Outreach & Convenings Federal Reserve Bank of Boston | bostonfed.org Data, Technology, & Innovation Outreach on Conditions in the Economy Financial Stability & Security Economic Issues Analysis Regional Opportunities & Challenges “FedListens” / Policymaking Outreach 8