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<br />xi <br />Beginning with the financial statements for FY 2014-15, the City, along with other governmental agencies, was <br />required to implement a new accounting standard, Governmental Accounting Standards Board Statement No. <br />68 (GASB 68). GASB 68 requires all governmental agencies to record unfunded pension liability on their balance <br />sheets (i.e., Statement of Net Position). Detailed information regarding the City’s pension liability is described in <br />Note 9. <br /> <br />Factors Affecting Financial Condition <br /> <br />The U.S. economy began 2025 in a position of relative strength, with real GDP hovering around 3 percent in the <br />fourth quarter of 2024, where it stood for the nine previous quarters. While inflation, as measured by the <br />Consumer Price Index (CPI) remained a concern, the rates stabilized enough in the latter half of 2024 to motivate <br />the Federal Reserve to lower interest rates for the first time in four years. By April 2025 CPI had fallen to its <br />lowest level since 2021. <br /> <br /> <br /> <br />The U.S. labor market also started the year strong, with April 2025 representing the 52nd consecutive month of <br />job gains, the second-longest period of employment expansion on record. Unemployment, at 4.2 percent in <br />April, remained historically low and at 0.2% wage growth continued, albeit at a slower rate. <br />7.C. - Page 23 of 269 <br />42