By MacKenzie C. Babb
They discussed the latest jobs figures as well as the European financial crisis and the outlook for the global economic recovery, according to the White House. The August 10 meeting was the third between the two this year.
They were joined in the Oval Office by Treasury Secretary Timothy Geithner, National Economic Council Director Gene Sperling and White House Chief of Staff Bill Daley.
The group met a day after the Federal Open Market Committee, the policymaking arm of the Federal Reserve, released a statement citing economic growth in 2011 as “considerably slower” than its members had predicted at their meeting in June. The committee is comprised of the seven-member Federal Reserve Board in Washington, the president of the New York Federal Reserve Bank, and four other Federal Reserve Bank presidents, who serve on a one-year rotating basis.
“The committee now expects a somewhat slower pace of recovery over coming quarters than it did at the time of the previous meeting and anticipates that the unemployment rate will decline only gradually” through the rest of the year, an August 9 Federal Reserve statement said. It added that economic indicators suggest a deterioration in market conditions in recent months as the unemployment rate has moved up, household spending has flattened, investment in construction is still weak and the housing sector remains depressed. The unemployment rate is a factor in the expansion or contraction of consumer spending, the leading force in the U.S. economy.
The committee said threats to the economic outlook have increased, and inflation rates continue to fluctuate. To minimize both risks to economic growth and risks from a possible rise in inflation, the committee announced it would keep the target range for the federal funds rate, the rate banks are charged for overnight loans, at 0 percent to .25 percent.
“The committee currently anticipates that economic conditions … are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013,” the statement said.
The U.S. economy added 117,000 new jobs from June to July as the unemployment rate ticked down slightly to 9.1 percent, the U.S. Labor Department’s Bureau of Labor Statistics reported August 5. The Commerce Department reported figures on July 29 showing an increase in gross domestic product (GDP) of just 1.3 percent from April to June, a rate well below economists’ expectations.
Austan Goolsbee, chairman of the president’s Council of Economic Advisers, said the latest figures show an “unacceptably high” unemployment rate that will require significantly faster growth to replace jobs lost in the economic downturn.
(This is a product of the Bureau of International Information Programs, U.S. Department of State.)