The national economy picked up in the fourth quarter of 2010 despite a slowdown in the Northeast, which had been outpacing the nation, and “we believe that conditions are in place for such higher growth in 2011 and 2012,” according to Federal Reserve Bank of New York president and chief executive officer William C. Dudley.
Saying he “would not be overly discouraged” by the Northeast’s slowdown,” he noted that “soft patches are not uncommon during economic recoveries.”
“The economy is healthier, but it is not yet well,” Dudley told a press briefing in New York, according to prepared remarks released by the Fed Monday. “In order to reduce joblessness significantly over the coming quarters, the economy needs to grow at a considerably faster rate than we have seen so far in this recovery.”
While “unemployment remains stubbornly high,” Dudley said “many indicators suggest that conditions are in place for stronger growth in the coming months.”
Again, he said, the region’s households “are in better shape than the nation as a whole” in terms of debt since “they increased their debt burdens less during the boom and thus have had less need to deleverage.”
Housing, however, faced “renewed weakness,” with softer prices and very low levels of construction, according to Dudley.
“We believe that it will take more time, perhaps as much as another year, for enough of these homes to be bought that residential construction might begin a meaningful recovery,” he said.
