Federal Reserve Bank of Dallas President Richard Fisher has said the U.S. economy is likely to undergo an extended period of slow growth while dealing with “financial headwinds” that will take years to wane.“We are likely to see a prolonged period of sluggish economic performance and uncomfortably high unemployment as businesses reallocate capital and labor,” Fisher said in a speech at the University of California in Santa Barbara. According to Bloomberg, the regional bank chief’s comments echo most policy makers’ concern that the economy will probably recover “only slowly” this year, according to minutes of their Aug. 11-12 meeting. In a sign companies are focused on cutting costs, some 570,000 Americans filed jobless-benefit claims last week, Labor Department figures showed yesterday. The figure exceeded the median forecast of 40 economists surveyed by Bloomberg. “Businesses will continue to run tight budgets as they try to preserve profit margins,” Fisher said at the event sponsored by the Laboratory for Aggregate Economics and Finance. “They will continue to focus on cost control, most painfully by shedding workers and driving those who remain on the payroll to higher levels of productivity.” He added: “It will be some time before we get back to net job creation.”
Fed’s Fisher: Prolonged ‘Sluggish’ Economy
“We are likely to see a prolonged period of sluggish economic performance and uncomfortably high unemployment as businesses reallocate capital and labor,” Fisher said.
September 4, 2009