The economy continues to strengthen, but payroll employment continues to lag. Business activity in manufacturing and service industries remains very strong as profits and cash flow continue to improve, but the recent pace of job growth has been sluggish. Households continue to benefit from recent tax relief and healthy gains in housing and stock-market wealth. Inflation remains benign, helping keep interest rates at historic lows. Last year’s GDP growth averaged 4.3%, the strongest in four years and well above the average of 3.7% in the expansion of the 1990s. Forecasters expect sustained and robust growth, low inflation, and accelerating job gains.