Federal Reserve's Charles Evans in Ann Arbor: U.S. economy 'simply not resilient enough'
Federal Reserve Bank of Chicago President and CEO Charles Evans has one word for the U.S. economic recovery so far: Disappointing.
Evans — who spoke to a group of about 300 people at Barton Hills Country Club on Tuesday at a breakfast hosted by Bank of Ann Arbor — said the U.S. economy is “simply not resilient enough” as he emphasized three big risk factors the country faces in its recovery.
The speech comes days after the central bank unveiled its new stimulus plan to buy billions of dollars in mortgage-backed securities until the outlook for jobs improves.
“Last week, the (Federal Open Market Committee) provided a more accommodative monetary policy that can help us achieve such resilience,” Evans said on Tuesday. “I strongly supported the Committee’s policy actions.”
Federal Reserve Bank of Chicago President Charles Evans spoke to a group of about 300 people at Barton Hills Country Club on Tuesday morning.
Courtesy photo
Evans - who described himself as an optimist - pointed to “disappointing” economic factors, such as the U.S. unemployment rate that has been hovering around 8 percent, as a reason to support further monetary stimulus.
“I think we can do better than this gloomy outlook,” he said. “That is why action is important.”
As Evans looks toward improving the national economy, he highlighted three risk factors the U.S. faces: a slowing global economy, the European crisis and the U.S. fiscal cliff.
“Under current law, tax and spending provisions enacted in various stimulus packages dating as far back as 2001 are scheduled to expire on January 1, 2013,” Evans said.
“Such fiscal contraction would be a serious threat to our fragile recovery,” he continued.
He said Europe’s debt crisis could have “significant adverse effects on (U.S.) growth” and its financial markets.
“And just the uncertainty over the downside scenarios is likely already putting a damper on investment and spending decisions in the U.S,” he said.
In a media briefing after the breakfast, Evans projected that in response to the new stimulus program, the U.S. unemployment rate could fall below 7 percent by the end of 2014.
In Washtenaw County, the unemployment rate is 5.5 percent, according the U.S. Bureau of Labor Statistics. The county’s jobless rates have declined each consecutive year since 2009.
“I think the Midwest is doing pretty well…you know, the automotive sector obviously has come back very well from a very, very difficult time,” Evans said.
He acknowledged that Ann Arbor is a U.S. city that is “not as susceptible to the national headwinds that are plaguing so much of the rest of the country.”
“I know in Ann Arbor, you’ve got the strong university presence, you’ve the hospitals, which are also quite vibrant, and you’ve got the better parts of the improvement in the auto sector, which can also increase activity and support further business activity around the entire area,” he said.
He added: “It makes sense that the fundamentals (in Ann Arbor) are quite good.”
Lizzy Alfs is a business reporter for AnnArbor.com. Reach her at 734-623-2584 or email her at lizzyalfs@annarbor.com. Follow her on Twitter at http://twitter.com/lizzyalfs.
Comments
Indymama
Thu, Sep 20, 2012 : 9:17 p.m.
You should go see the movie -2016, Obama's America- it will explain a lot about what is ahead and where Obama wants to take the United States. GO SEE IT!!..whether you are FOR Obama or Against him, go see this movie. If you like Michael Moore's films, go see this one . If you don't like Michael Moore's films...go see this one!! Yes you!!
Trepang674
Thu, Sep 20, 2012 : 12:52 p.m.
21 trillion dollars in off-shore accounts. - half of that from US companies and individuals (Mitty-boy)...If that had 1/2 the corp tax we could see our deficit disappear quickly. This off-shore money is fueling off-shore employment no doubt...could help the job-less here in US. Fed has taken a blind eye to this pot-o-money and aided the carelessness of world banking practices. We are ALL victims - perhaps more than 47% of us.
David Muzzatti
Wed, Sep 19, 2012 : 2:20 p.m.
Say it with me now......"The Federal Reserve is a Privately-Owned banking cartel that answers to no one......except maybe a Rothschild. The U.S Government is the borrower & the borrower is always slave to the lender. The Banksters know EXACTLY what they are doing.
LXIX
Tue, Sep 18, 2012 : 9:30 p.m.
Nice tie. The income gap between the rich and the other 99% increased yet again last month. Why? Some used to say more tax cuts for investors would solve the jobs problem - they are now silent. Some used to say more deregulation will energize the economy - $60 trillion in Banks derivatives later they wonder why there is little investor confidence in the economy. Some used to say opening the borders for global trade will creates jobs - they've learned alot too. Some used to say cut government spending while promoting two budget-killing wars - how about those cuts now? Some used to say drill-baby-drill but still pay just as much at the pump - maybe they will figure out the oil is not here any more and start looking for alternative US energy sources - and save 1/4 trillion in trade loss every month... When the Fed gets worried - people should really get concerned..
Indymama
Thu, Sep 20, 2012 : 9:10 p.m.
..and that is why each and everyone one of you, yes YOU, need to vote for a change in the current occupants in Washington, and in the White House!!
justcurious
Tue, Sep 18, 2012 : 8:42 p.m.
This man and all in his private organization need to lose their jobs because of what they have done to the economy. They are not there for the taxpayer but rather for the rich who are getting richer on the backs of the rest of us.
Mike
Tue, Sep 18, 2012 : 8:32 p.m.
Re-elect Mr. Obama and we can find out what economic pain is really about. Congress will never willing cut spending, it will take a financial disaster and people marching on DC to get them to do anything and by then it will be too late. Our governing body only reacts to problems, nothing pro-active there. I don't really care for Romney personally, but he does know how to turn things around.
greg, too
Wed, Sep 19, 2012 : 3:14 a.m.
How does he Mike? What is he actually going to do? He won't tell us. I am not an Obama fan at all. I desperately wanted the GOP to put up a real candidate, one with actually thoughts and policies and ideas that don't change with each and every speaking engagement...not the one they chose who repeatedly appeals to the lowest common denominator (i.e. their base) and had proven to be completely inept in most everything he has done as a presidential candidate over the past decade (this isn't his first rodeo). But they failed...so yes, i hope we have 4 more years of him trying to fix Bush and Clintons (slick Willie had a part in this) mistakes. Will he succeed? Who knows. But it beats someone who has an admitted disdain for the middle class and who has no actually ideas about how he will fix the country. GIVE US A PLAN TO COMPARE.
Top Cat
Tue, Sep 18, 2012 : 5:22 p.m.
The word should be "predictable". Bad monetary policy + $1 trillion deficits + destructive energy policy + excessive government regulation + Obamacare = low growth economy with no jobs.
greg, too
Wed, Sep 19, 2012 : 3:15 a.m.
TopCat, you do know that repealing "obamacare," per the Congressional Budget Office, would run the country more than $100 billion? Also, per a major west coast healthcare company (kaiser permanente) it would make medicare insolvent in less than 5 years. Seems odd that the GOP, a party of old people, would like this plan. How about we stop invading countries, pull our forces back, make them more equipped to fight a 21st century war instead of a 20th century (i.e. less tanks, planes, etc and more intelligence) while defending our borders, and maybe we save trillions? and then reinvest that money in the country? And Topcat, a "low growth" economy is better than the economy he inherited.
Tom Todd
Tue, Sep 18, 2012 : 11:07 p.m.
No More WARS and Foreign aid to any Countries should resolve most of our issues.
81wolverine
Tue, Sep 18, 2012 : 5:20 p.m.
Nothing is going to matter in the long run unless the bureaucrats in Washington actually deal with the budget deficit. The deficit will continue to undermine the solvency of the U.S. until it's finally dealt with (reduced) or it causes another global economic collapse. Except that the next collapse will make 2008 look like boom times. There is only one solution to the deficit: significant reform of entitlement programs (social security, medicare, medicaid, etc.) COMBINED WITH selected tax and other revenue increases. It'll be painful but it's the only course of action the politicians have left the U.S. with.