SEOUL — Many observers may be surprised how quickly U.S. employment recovers as there is “good reason to believe” jobs growth will continue as the year progresses, Federal Reserve Bank of Philadelphia president Charles Plosser said Monday.
“There’s good reason to believe over the course of this year we’ll continue to improve on the employment front and see employment growth,” Plosser said at a conference here sponsored by the Bank of Korean, the country’s central bank.
“There’s uncertainty about how rapid that will be. I’m cautiously optimistic. I expect many people will be surprised at how rapidly employment will come back,” he said.
Asked about chances for a double-dip recession in the U.S., Plosser said “the prospects for continuing growth in the U.S. remain relatively solid and broad-based.”
“I don’t anticipate at this point that the U.S. will see a double dip,” he said.
But Plosser added that the European sovereign debt situation “raises some clouds on the horizon that we have to be cautious about.”
Asked if the turmoil in Europe could delay rate hikes in the U.S., he said: “It’s true that things could happen that could change the pace of the exit strategy, but I don’t see them happening yet. How the crisis in Europe develops will dictate how we respond,”
Plosser said he sees the recent rise in the dollar as a flight to safety, adding that “it’s not clear at this point if that increase in dollar value relative to the euro will be a serious crimp to U.S. growth.”
— Market News International