Posted on 09/24/2003 7:05:32 AM PDT by Brian S
BY LAWRENCE MESSINA Associated Press
CHARLESTON, W.VA.--A Federal Reserve official told Southern governors Tuesday to expect economic growth paired with lagging employment in the region over the next year.
"The economy is recovering, but as you know, it's a jobless recovery," said Federal Reserve Bank of Richmond President J. Alfred Broaddus Jr.
Addressing a panel session at the 69th annual meeting of the Southern Governors' Association, Broaddus outlined his and other forecasts that predict the region's economy will grow by 4.5 percent over the next year.
He called the consensus forecast "quite plausible" and "sensible." But even if true, Broaddus said, the unemployment rate will likely decline from its current 6.1 percent level to only 5.75 percent by the end of next year.
"We would still have slack in the labor markets," Broaddus said. "A weaker performance cannot be ruled out if the job market remains soft." Broaddus blamed the bleak employment picture on greater worker productivity, which in itself is important for the nation's financial health.
He added that consumer spending must continue to improve and should be boosted by the latest round of tax cuts. He similarly said business leaders must be "a little less skeptical and a little less cautious." "It is important that they would begin to make investments based on a brighter picture" as offered by the forecasts, he said.
Broaddus said the Federal Reserve system can deal with a slowdown in price increases, calling the risk "quite small." The annual inflation rate, meanwhile, remains at a manageable 1.5 percent.
"The challenge now is to hold it in this neighborhood," Broaddus said during a question-and-answer session following his speech. "That will provide a solid foundation for that which we care very much about, and this is improvement of the job market." While declining to comment on the dollar's health, Broaddus said the improving U.S. economy is one of only a few bright spots globally.
"The world economy has been weak," he said. "We need to see a better performance internationally." Broaddus also discounted the short-term effect of record federal deficits.
"I don't believe that that development itself is going to retard the recovery that we are expecting," he said. "A deficit is not, itself, a huge or immediate problem." Broaddus' district covers Maryland, Virginia, the Carolinas, Washington, D.C., and most of West Virginia.
He is also a member of the influential Federal Open Market Committee, which voted Sept. 16 to keep a key short-term interest rate at a 45-year low of 1 percent.
Jack Guynn, an FOMC member and Broaddus' counterpart overseeing the Atlanta-based district, said Monday in Florida that job loss is becoming concentrated in fewer sectors, primarily manufacturing.
This year's SGA meeting is the first to be held in West Virginia's capital in the group's history. The SGA encompasses the Southeast as well as Puerto Rico and the U.S. Virgin Islands.
West Virginia Gov. Bob Wise has been the SGA's chairman, another first for the Mountain State. Wise handed over the SGA reins at the summit's conclusion Tuesday to Virginia Gov. Mark R. Warner.
And you're still a loser. That's the way it is.
Everybody else is silly and you're the smart one... Everybody else is immature and you're the grownup... Pathetic.
You're not big on that whole "attention to detail" thing, are you?
I don't know about you, but I'm taking my ball and going home. Hmmpph!
Not enough bad stuff can happen to you, China_Dawg.
You typed your usual "you lose", which means you lose.
Agreed.
Yankees are all the same. Leftist to the core.
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