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Federal Reserve official predicts slow recovery
by Savannah Weeks
sweeks@neighbornewspapers.com
June 13, 2012 10:23 AM | 1141 views | 0 0 comments | 19 19 recommendations | email to a friend | print
Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, predicts moderate economic growth for the nation and region, including Paulding County.

“I have heard repeatedly from business contacts in this area that the challenge for Paulding County and the entire metro Atlanta area remains dealing with the consequences of the real estate downturn,” said Lockhart at the June 7 Paulding County Chamber of Commerce Georgia Power Luncheon.

Lockhart said Paulding County was one of the fastest-growing counties in the nation during the previous decade.

“The recent recession and resulting decline in population growth left many residential and community developments stressed,” he said.

“I know with great interest the plan you have in Paulding County to grow and attract a wider variety of businesses.

Transforming from a bedroom community to a more resilient center for businesses will help alleviate some of the stresses caused by a concentration in real estate.”

The president said eventually Paulding County and the metro area will “emerge from the real estate slump.”

“Looking to the immediate future though, most of our business contacts in the state and the region are planning for a continuation of the modest growth trends we have witnessed to date,” he said.

According to Lockhart, the housing market remains weak, which in turn, influences the economy.

“Home prices influence the health of the broad economy through their effect on consumer attitude,” said Lockhart. “Home prices in many markets appear to be stabilizing, but there remains a sizeable inventory of unsold homes that is likely to work against a sustained upturn in home values.”

Lockhart’s “baseline outlook” on the U.S. economy includes slow growth, with a decline in unemployment.

“I expect the recovery process to be slow and drawn out,” said Lockhart. “I think the most reasonable expectation is moderate growth, a slow and possibly halting decline of unemployment, with inflation staying close to the Federal Open Market Committee’s 2 percent target.

“I don’t see this narrative changing much to the upside over the medium term.”

Lockhart concluded by saying that the country is in a better position to withstand threats to stability than in 2008 and 2009 and that there has been substantial progress.
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