Main Line Chamber’s Economic Forecast Featured Philadelphia Fed’s President and CEO

Main Line Chamber’s Economic Forecast

Featured Philadelphia Fed’s President and CEO

 

WAYNE, Pa. – January 8, 2008 – Dr. Charles I. Plosser, president and chief executive officer of the Federal Reserve Bank of Philadelphia, enlightened Main Line Chamber members and guests on the economic trends and predictions for this year at the 2008 Economic Forecast Breakfast on Tuesday, January 8, 2008.  

 

Held at the Philadelphia Country Club in Gladwyne, Pa., Plosser presented his economic outlook for the year.   He described how national and international economic trends will impact the country as well as the big picture for business in the coming year.

 

Plosser discussed risks to the economy and offered his perspective on inflation, the labor market, and the housing sector.

 

Discussing overall business concerns for the year, Plosser said, “I think the U.S. economy will experience several quarters of sluggish growth in 2008 before returning to a sustained expansion over the next two years. There are risks to the downside in terms of the possibility of even weaker economic growth. A substantially weaker outlook than expected, particularly if that weakness is projected to be more prolonged than anticipated, may require further adjustments to policy.”

 

Employment was another topic Plosser examined, pertaining to the market as a whole.  “In labor markets, the average unemployment rate for the fourth quarter was 4.8 percent, although it ended on a somewhat sour note by rising to 5.0 percent in December. Inflation seemed to moderate somewhat in the first part of the year, but the rise in prices for oil and other commodities in the second half of the year indicates that inflationary pressures are still with us.”

 

In terms of the real estate outlook, Plosser said, “I expect the decline in housing activity will bottom out near the middle of the year. Residential investment should then turn slightly positive in the latter part of 2008, for the first time in more than two years. But I don’t expect significant improvement in the housing sector to become apparent until some time in 2009.”  

 

Plosser reported that a source of risk for the economy is higher inflation and that controlling inflation is uniquely a responsibility of the Federal Reserve.  He stated firmly, “We must remain vigilant on the inflation front.” 

 

He is a voting member of the Federal Open Market Committee (FOMC), which is responsible for conducting our nation’s monetary policy. The FOMC reviews economic and financial conditions, determines the appropriate stance of monetary policy, and assesses the risks to its long-run goals of price stability and sustainable economic growth.  

 

The Federal Reserve Bank of Philadelphia is one of 12 regional Federal Reserve Banks across the U.S. that, together with the Board of Governors in Washington, D.C., serve as our nation's central bank.  For additional information, visit www.philadelphiafed.org.

 

 

The Main Line Chamber of Commerce, on behalf of its 1,800 member base, spans nine boroughs and townships constituting the region known as the Main Line. As the Main Line’s business advocate, The Main Line Chamber of Commerce is committed to enabling members to succeed, promoting economic growth in the region, developing an informed business community and enhancing the quality of life on the Main Line. In its 88th year of service as the area’s go-to chamber of commerce, The Main Line Chamber is the second largest chamber operating in Delaware, Chester and Montgomery Counties and the fifth largest in the Southeastern Pennsylvania region. The Main Line Chamber is the first Chamber recognized in the state of Pennsylvania with a 5-Star Accreditation rating from the U.S. Chamber of Commerce.

 

---