Economic growth continues at a healthy pace, inflation remains low, and twenty-five months of continuous employment gains have added over 3.7 million new jobs to payrolls. Last month, 146,000 new payroll jobs were created and the unemployment rate edged down to 5.0%. Annualized growth in the inflation-adjusted gross domestic product (GDP) was a robust 3.8% in the first quarter, matching the growth rate in the fourth quarter of 2004. Forecasters see a continuation of healthy growth in GDP and employment along with low inflation. Energy and some commodity prices remain elevated, but general inflation is tame. In light of healthy economic growth and modest overall inflation, the Federal Reserve is expected to continue its policy of increasing overnight interest rates at a measured pace.