U.S. economic growth in the first half of the year has been quite a bit slower than expected, a top U.S. central bank official said on Thursday, causing him to temper his expectations about the pace of economic recovery.
William Dudley, the president of the Federal Reserve Bank of New York, told business leaders in New Jersey that only some of the restraints on growth in the first half of the year, such as high oil prices and Japan's earthquake, can be considered temporary.
It is clear to me that not all of the weakness was due to these one-time factors, and in light of this, I have revised down my expectations for the pace of growth going forward, he said.
The central bank's policy-setting Federal Open Market Committee (FOMC) took the unprecedented step last week of promising to keep interest rates near zero for a set period of time, at least until 2013. The Fed also said it was weighing other options to help strengthen a weak recovery.
Dudley noted that market interest rates fell after the announcement, which should help provide some additional support for economic activity and jobs.
Expanded hiring and output nationally would help boost activity in many New Jersey industries, he added.
Dudley was visiting the state to discuss regional economic developments. The state faces challenges in high debt and delinquency levels and a jobless rate slightly above the national rate, he said, but job growth in New York City should provide opportunities.
(Reporting by Edith Honan, Writing by Steven C. Johnson, Editing by Chizu Nomiyama)