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“Views on Current Economic Conditions and Monetary Policy” Council on Foreign Relations’ C. Peter McColough Series on International Economics Susan M. Collins President & Chief Executive Officer Federal Reserve Bank of Boston September 30, 2025 Figure 1 Job gains have slowed, but the unemployment rate has been stable at a low level. B: Civilian Unemployment Rate 800 7.0 700 6.5 600 6.0 500 5.5 Percent Three-month average change (thousands) A: Total Nonfarm Payroll Employment 400 5.0 300 4.5 200 4.0 100 3.5 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 3.0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 NBER-dated recession Note: The period spanning March 2020-December 2020 is removed for clarity. Source: Bureau of Labor Statistics / Haver Analytics. Federal Reserve Bank of Boston | bostonfed.org 2 Figure 2 Robust labor productivity growth is supporting economic activity. 125 120 2.6% Index: 2017=100 115 1.2% 110 105 100 95 90 85 2006 2008 2010 2012 Real Output per Hour, Nonfinancial Corporate Sector 2014 2016 2018 Average Annualized Growth (2006:Q1-2019:Q4) 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 3 Figure 3 Tariffs are affecting core goods prices but inflation elsewhere is consistent with achieving the 2% target. Prices for Personal Consumption Expenditures (PCE) 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 12-Month 2022 2023 2024 2025 2019 3-Month (annual rate) 2020 2021 2022 2023 2024 2025 2019 2020 2021 2022 2023 2024 2025 Percent Change Percent Change 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 4 Engagement with Stakeholders in the Economy Federal Reserve Bank of Boston | bostonfed.org 5