The U.S. economy should continue growing this year, Jeffrey M. Lacker, president of the Federal Reserve Bank of Richmond told the Richmond chapter of the Risk Management Association this afternoon.
Lacker said consumer spending has resumed growing last year, though he added "consumers are by no means exuberant."
The rise in the savings rate, to more than 4 percent now from under 2 percent last summer, shows people are still nervous about the incomes in the future. It also shows they are focused on building up nest eggs hit hard by drops in securities prices and home values, Lacker said.
Business spending on equipment and software also is on the rise, he said.
In housing, there are signs sales and construction activity have improved modestly, but Lacker said they are still below the levels needed to accommodate a population growth.
"While I expect residential investment will no longer be a drag on GDP [gross domestic product] growth, a lengthy period of adjustment may be necessary before any growth in residential investment is warranted," he said.
Email
Facebook
Google
Twitter
Favorites
More
Advertisement