Atlanta Fed President Lockhart: 2013 Pivotal for U.S. Economy
The year 2013 will be pivotal for the nation's economy, Atlanta Fed President Dennis Lockhart said in a January 14 speech to the Rotary Club of Atlanta. Fiscal policy deliberations in Washington, D.C., will be especially critical this year, in Lockhart's view.
For now, the nation's economy remains in a slow-growth mode. Accelerating that growth depends heavily on job creation.
"And to a substantial extent," Lockhart remarked, "the pace of job creation is riding on reducing uncertainty, especially policy uncertainty. The coming months will be, in my opinion, something of a moment of truth for fiscal policymaking. The year 2013 will be a test of the country's ability to govern itself in the realm of public finances."
Economy still in "a long slog"
In the year past, the economy's performance remained sluggish. Growth in gross domestic product (GDP) for 2012 is expected to clock in at about 1.8 percent when the numbers are finalized, Lockhart said.
"We remain in a long slog," he said of the continued slow recovery. Lockhart said he is expecting GDP growth of 2 to 2.5 percent for 2013, "basically more of the same."
FOMC clarifies guidance
Lockhart emphasized that these benchmarks are thresholds, not triggers for automatic action. "The 6-1/2 percent unemployment threshold—conditional on inflation being contained—was introduced to make it easier for people to assess how policy might evolve along with economic conditions," Lockhart explained. "It was not intended to signal any fundamental change in policy."
January 22, 2013