Agenda - 05-05-2016 - 8-a - FY 2015-16 Third Quarter General Fund Financial Report

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19 strong gain in the dollar's value. Since a stronger dollar makes U.S. exports more expensive, a downside of this "vote"was a slight reduction in exports. But with continued domestic oil production reducing the need for imported foreign oil, the relative trade deficit maintained its moderate level. Households continued to improve their economic position in 2015. Due to low inflation, real median household income grew a strong 5.3%, well above both the twenty year average and the post-recessionary average. Real hourly earnings increased more than in the years since the recession, and work hours also edged up. Household debt relative to GDP, which almost reached 100%prior to the Great Recession, moderated close to the 1990-2010 annual average. Low interest rates also allowed households to post a thirty-year low in their debt service payments as a percent of disposable income. The personal savings rate, which fell to negative readings prior to the recession, continued to register above 5%. With a stronger economy, the fiscal situation of the federal government became less unbalanced. As a percent of the economy(GDP), the deficit in 2015 was below the 1990-2010 annual average and well under the 2010-2014 average when fiscal policy was used to stimulate economic growth. The relative size of the total federal debt declined slightly in 2015. And again — compliments of low interest rates —the carrying cost of the federal debt(federal interest payments as a percent of GDP) in 2015 was under the post-recessionary average and just over half of the annual average posted in the two decades from 1990 to 2010. After almost a decade of first attempting to brake the decline during the Great Recession and then trying to stimulate the economic recovery, monetary policy operated by the Federal Reserve turned the corner in 2015. Fed policy was enormously accommodative during and 6