By Steven K. Beckner
Williams said the first-quarter slowdown was partially due to
“transitory factors,” especially higher gasoline prices that he said
have taken money out of consumers’ pockets and hurt their confidence.
But he said the economy also faces “other persistent headwinds in
addition to high gas prices.”
“The housing market remains severely depressed,” he observed. “The
large overhang of unsold homes and the shadow inventory of homes in
delinquency or foreclosure offer scant hope for a significant rebound in
construction or home prices in the near term.”
Williams nevertheless said he is “confident our economy has enough
forward momentum to overcome these stiff headwinds.” He predicted 3.25%
growth this year and “a solid pace” of hiring.
However, “We face a long road ahead before we reach normal levels
of unemployment,” he said, adding that his projected growth rate “is
sufficiently high to help bring the unemployment rate down gradually,
but it will take a long time before we dig ourselves out of the deep
hole we fell into during the recession.”
“Though the economy is forging ahead, there is still an enormous
amount of idle resources out there — a situation that will likely
persist for several years,” he added.
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** Market News International Washington Bureau: 202-371-2121 **
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