U.S. economic growth may not meet expectations for the first quarter but the outlook for the remainder of 2011 remains reasonably strong, according to Federal Reserve Bank of St. Louis President James Bullard.
Labor market conditions have improved, manufacturing activity remains robust, and U.S. financial stress levels are near normal, Bullard said Monday in Louisville, Kentucky.
Additional, global uncertainties are likely to dissipate, giving the economy a boost later in the year.
Japan's nuclear crisis, Middle East turmoil, and Euro zone debt problems may escalate but are more likely to be resolved without becoming global macroeconomic shocks, he said.
Bullard expects private sector job growth to pick up in 2011.
"U.S. firms have cash and are looking for opportunities to invest," he added.
Even though Bullard said inflation is currently "quite low," he spoke in favor of the Federal Reserve adopting inflation target standards in the future.
"Inflation targeting is another way to force more accountability to the central bank and anchor longer-term expectations. Make the central bank say what it intends to do," he said, "and hold the central bank accountable for achieving the goal."
by RTT Staff Writer
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