Federal Reserve Bank of St. Louis President James Bullard said U.S. economic growth will likely pick up to 3.5 percent next year, pushing the unemployment rate to close to 7 percent.
Gross domestic product will increase close to 2 percent this year before accelerating, Bullard said in a speech in St. Louis, whose presentation slides were released with no commentary or text. The unemployment rate in 2012 will be about 8 percent, Bullard said, citing St. Louis Fed estimates. Personal consumption expenditures inflation will be 2 percent this year and next, in line with the central bank’s target, he said.
The regional Fed bank president last week said he was still weighing what position to advocate at next week’s Federal Open Market Committee meeting, in which Fed officials will consider whether to make adjustments to their purchases of $40 billion of mortgage debt a month in a third round of quantitative easing.
Recent economic data have been largely better than expected, with retail sales rising 1.1 percent in September, Commerce Department figures showed today. That followed improvements in housing, consumer confidence and the unemployment rate. The Fed’s Beige Book report on regional conditions last week said the U.S. economy was expanding “modestly” last month, supported by improvements in housing and auto sales, even as the labor market showed little change.