The head of the New York Federal Reserve William Dudley sees little in the economy that encourages him to believe any real recovery is about to happy.
In comments today he said
Growth of consumer spending strengthened in the fourth quarter, adding a needed boost to the economy. Much of this stronger spending was for durable goods, particularly motor vehicles. In the fourth quarter of 2011, sales of light-weight motor vehicles reached the highest quarterly rate since the first half of 2008. This increase is encouraging because it suggests that consumers are now more able to borrow money to finance their purchases of cars and trucks.
However, I must note that this boost is likely due in part to temporary factors. First, vehicle sales in the middle of 2011 were depressed due to supply chain disruptions stemming from the tragic earthquake and tsunami in Japan. In addition, a stimulus-related tax provision that allowed businesses to immediately expense some investments expired at the end of 2011. So, some purchases were no doubt timed to occur before that expiration.
Moreover, for goods and services other than durable goods, the rate of growth of consumer spending has been rather tepid. The picture that emerges—up to now—is of a consumer who continues to be cautious.
And, there are his worries about Europe:
global financial and economic conditions may impede faster growth. In particular, growth in the euro area is slowing and a recession may be underway with adverse direct and indirect effects on the U.S. economy.
Nothing ground breaking in his comments, but it is another vote that 2012 will not be a good year for the US economy
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