Fed Leader: Turnaround Is Coming
Christina H. Davis
Jeffrey Fuhrer of the Federal Reserve Bank of Boston speaks at the WBJ's 2011 Economic Forecast event.
The U.S. Economic recovery is poised to transition this year, according to Jeffrey Fuhrer, of the Federal Reserve Bank of Boston.
"The recovery we've had so far has been sustained and propagated by government support of one form or another," he said. The next phase, and the more desirable phase, is for the private sector to grow enough to fuel that recovery.
"We think we see that happening," he said.
He pointed to data that showed that both consumer and investment spending was up in the fourth quarter as support for his view.
Fuhrer was the keynote speaker at the Worcester Business Journal's Economic Outlook event held Friday morning at the Beechwood Hotel. Other speakers included Frederick Eppinger, CEO of The Hanover Insurance Group, and Timothy Warren, CEO of the Boston-based real estate tracking firm The Warren Group.
While Fuhrer said he is somewhere between cautious and hopeful about the U.S. Economy, he did review some of the fundamental issues that are prohibiting more robust recovery. Those include a high unemployment rate, which hovers around 9 percent nationally, as well as depressed home prices.
Those two factors are conspiring to sustain the foreclosure crisis, he said.
While there are some who are sounding the alarm about inflation worries, Fuhrer noted that inflation is still very low, around 1 percent, while a healthier level is around 2 percent.
Current projections are for the GDP to grow at a relatively slow rate of about 3 percent per quarter, according to Fuhrer, however he said there are some signs that growth may reach 4 percent.
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