Dennis Lockhart, president and CEO of the Federal Reserve Bank of Atlanta, on Friday talked about current monetary policy and the effects of inflation on the economy in a speech before the Knoxville Economics Club in Knoxville, Tenn. He also addressed the role of manufacturing in the economic recovery.
While the economy is expanding, although at a slower pace than Q4’s rate implied, Lockhart said that a number of factors are responsible for holding it back. Among those factors are a weak housing sector, rising oil and energy prices, political instability in the Middle East/North Africa (MENA) region, and unemployment—as well as supply chain concerns for manufacturers. Most of these things are serious concerns for consumers, having an impact on consumer confidence that slows recovery.
Manufacturing production, he said, was a large contributor to the recovery; both production and employment have rebounded strongly, and have “outpaced growth in the rest of the economy.” A rise in exports also helped, with demand for U.S. manufactured goods creating the largest contribution to GDP growth since World War II.