Atlanta Fed's Lockhart says gives mixed assessment of the economy for 2011, but says that monetary policy, i.e. QE2 helped
Key Points from Dennis Lockhart's - President of the Atlanta Fed - speech. The speech was cancelled due to global warming, i.e. snow in Atlanta. I'm still trying to get some tangible number for the amount that QE2 "helped". Transcript is available via Atlanta Fed:
• According to Lockhart, the economy seems to have gained durable momentum. Growth in gross domestic product, personal income, and jobs should be better this year compared with 2010. Lockhart thinks that although the growth pace is likely to remain relatively modest, economic performance could surprise on the upside.On Jobs
• In Lockhart's view, the recovery continues to be constrained by headwinds, especially the interplay among the housing market, household finances and consumer spending, ongoing credit market repair, and lingering uncertainty restraining business and consumer spending. Lockhart believes these headwinds to a significant degree reflect structural adjustments that in the longer term will place the U.S. economy on a stronger footing.
• Lockhart believes the housing market will be slow to improve. Weakness in the housing market, especially the downward trend in home prices, has been restraining consumer spending. Consumers have been reducing debt and saving more, and this process of deleveraging may continue for some time.
• In Lockhart's opinion, the credit system is not yet back to full health, but the stage is set for some credit expansion in 2011.
Friday's job report confirms the picture of an economy that is moving forward but at a modest pace. The rate of job creation is still below the level that will consistently bring down the unemployment rate, but the labor market is showing signs of improvement.On QE
I have argued—as have others—that in a world where the U.S. economy still accounts for nearly a quarter of global output, it's in everyone's interest that the U.S. economy come back as quickly as possible. I believe monetary policy has helped in this regard.