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15 <br /> However, the nation's labor force participation rate — defined as the <br /> proportion of adults working or actively looking for work — still stayed at 30-year <br /> lows in 2014. The continuing retirement of baby boomers and the increased time <br /> of young adults in post-secondary education are parts of the explanation that are <br /> not troubling. Troubling is inadequate skills possessed by some potential workers. <br /> However, in early 2015 the labor force participation rate made modest gains. <br /> The housing market continued to improve in 2014 and early 2015 (Figure 4), <br /> yet with sales and construction (permits) levels still far below pre-recessionary <br /> highs. The market is ultimately driven by young buyers, and many of the <br /> millennial generation (those born between 1980 and 2004) have not yet shifted to <br /> buying from renting as they stay in school longer and deal with college debt. <br /> There is also continuing concern about the ability of small contractors to obtain <br /> loans. <br /> There is some suggestion the overall inflation rate (including prices of all <br /> consumer goods and services) may be accelerating (Figure 5). It is logical to see <br /> greater price pressures as the economic recovery moves in to its sixth year. Still, <br /> the annualized level in 2015 (2.4%) is moderate and eases worries associated with <br /> potential deflation. <br /> Possibly reflecting higher inflationary expectations, long-term interest rates <br /> edged higher in late 2014 and early 2015 (Figure 6). The trend can also be <br /> interpreted as a positive sign if the increase reflects improved loan demand. <br /> Additionally, as interest rates earned on loans rise, banks will be more motivated to <br /> dip into their substantial reserves and make them available for further lending. <br /> National Outlook: The Recovery Continues <br /> All signs point to another year of economic growth in the nation in 2015. <br /> Although real GDP growth was negative in the first quarter due to weather <br /> conditions, it is predicted that growth will be rigorous enough in the remaining <br /> quarters to result in an annual real GDP growth rate for 2015 of between 2.75% <br /> and 3.0%. If accurate, this would be the strongest improvement in real GDP since <br /> 2005. <br /> 5 <br />