Business

<< Previous   of   Next >>   ADVERTISEMENT   Related Stories • Business Briefly: Boeing sells 15 freighters to FedEx 1/13/09   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Tuesday, January 13, 2009 U.S. economy likely to remain mired Associated Press WASHINGTON -- The country's economic health is "very weak" and is likely to stay that way at least through the first six months of this year, a Federal Reserve official said Monday. "Clearly the U.S. economy is in a tough fight against pernicious economic forces," Dennis Lockhart, president of the Federal Reserve Bank of Atlanta said in a speech to business people in Georgia. Lockhart this year is a voting member of the Federal Reserve Open Market Committee, the Fed's policymaking group. Led by Fed chairman Ben Bernanke, the panel sets interest rates and is leading the central bank's efforts to battle the worst financial crisis since the 1930s. The economy probably shrank at an annualized rate of between 4 percent and 6 percent in the final three months of last year and likely will turn in a similar performance in the first quarter of this year, Lockhart said. The government will release fourth-quarter results at the end of January and will report on the first quarter in late April. "Looking ahead, the overall economy is very weak, and I expect it will remain weak at least through the first half of 2009," he said. But Lockhart was hopeful for "an improving economy in the second half" as financial markets stabilize somewhat. However, he added: "To temper that a bit, there is always the risk of a shock or reversal in the financial sector or elsewhere that could again alter the outlook to the downside." Still, Lockhart sounded a tad more optimistic about recovery prospects than most private economists, especially after a grim report last week showed the nation's employment climate getting worse. The unemployment rate jumped to 7.2 percent in December, a 16-year high, as employers slashed another 524,000 jobs. In a historic move, the Fed last month ratcheted down its key interest to hover between zero and 0.25 percent, a record low. The central bank signaled it would hold rates at such levels for some time to help cushion the blows of a recession that has just entered its second year. The Fed also pledged to use unconventional tools to help revive the economy. "I want to assure you the Federal Reserve still has considerable ammunition in reserve to be used as needed" to turn the economy around, Lockhart said. READER COMMENTS Be the first to comment. You must be a registered user and verify your e-mail address to post comments to blogs or articles on HeraldNet. To register, click here. To read other terms and conditions, click here. Log out

1. Fire destroys Silver Lake landmark 2. Tree clearing, mud slide angers Everett neighbor 3. County tackles bikini barista rules 4. Six people injured in Machias car crash 5. Edmonds councilwoman dies at 59 6. Search for missing hiker called off 7. Later start for school day unlikely in Marysville 8. Extended tax credit should spur home sales 9. Hopes for Snohomish excursion train may hinge on railway purchase 10. Designing a new business 2 - Top 10 Stories Most Talked about 3 - Top 10 Stories Most Emailed

• Gough on track to keep job • Jazz vocalist headlines NPAC • Mountlake Terrace makes football history • Tax revenue sagging, city budgets lagging • ‘Touch of Magic' show opens at Gallery North • Jackson repeats as South champs • Holiday Bazaars Calendar • Meadowdale storms back to grab title • Edmonds moves to Fire District 1 • Boeing will build, flight test and deliver 787s in South Carolina to spe ... • Snohomish County EDC promoting job growth in key industry clusters • $4 million grant to advance brain tumor research has Everett links • Providence medical center construction tops off its 12-story steel frame ... • Tulalip affordable housing project to be financed by KeyBank, Raymond Ja ... • Arlington's Lak of Ink has a growing following for Luke Kooyman's creati ... • Bank of the Northwest formed • Cascade Bank earns $1.6 million