Atlanta Fed President Sees More Balanced Growth Ahead
For immediate release: Nov. 6, 2003
BATON ROUGE, La. - Economic growth is likely to continue at a respectable rate into 2004, bolstered by an increasingly broad range of activity spreading through the economy, said Jack Guynn, president and chief executive officer of the Federal Reserve Bank of Atlanta.
“I believe the economy is gaining a stronger foothold as weaknesses become increasingly confined. What we're seeing is growth that is spreading across industries and sectors, becoming more balanced,” he said.
Speaking to the Chamber of Greater Baton Rouge, Guynn said this year’s rebound in business spending is “perhaps the most important story in the economy.” Business spending on equipment and software surged 15 percent in the third quarter and grew in five of the past six quarters, he added.
Guynn cited anecdotal reports that business lending may be poised to increase from currently low levels. “When viewed along with recent activity in the market for initial public offerings and relatively good business in the bond market, the picture of a more vigorous corporate sector has begun to emerge,” he said.
Consumer spending is likely to remain solid, Guynn noted, although probably at levels more modest than the 6.6 percent annual growth reported during the third quarter. He believes business and consumer spending will combine to boost sagging labor markets.
Guynn acknowledged continued weakness in job growth, noting that companies continue to adjust to a rapid pace of change. “All of the tough decisions and recalibrations are by no means behind us,” he said. But he notes areas of hiring strength, including business services, health care, education and residential construction. “I expect to see additional hiring for permanent jobs as we move into 2004 and companies reach the limits of what they can accomplish by leveraging productivity gains and existing staff,” he said.
The Federal Reserve Bank of Atlanta serves the Sixth Federal Reserve District, which encompasses Alabama, Florida, Georgia and parts of Louisiana, Mississippi and Tennessee. As part of the nation’s central banking system, the Atlanta Fed participates in setting national monetary policy, supervises numerous commercial banks and provides a variety of financial services to depository institutions and the U.S. government.