Friday AM September 5, 2008
by: Ed Mayberry, September 4, 2008 6:09:46 pm
The Federal Reserve remains non-partisan and non-political. But Federal Reserve president and CEO Richard Fisher talked about circumstances the next president will face.
"The housing market has yet to find its bottom. Credit markets remain tempestuous. Creditors are tightening their standards. Consumers and businessa are battening down their hatches. The price of Chinese labor and other emerging country labor and inputs — which we've come to depend on in the United States and elsewhere — have been rising. Business margins are being squeezed. Consumers are suffering from declining real income. Savings and investors are confronted with negative real rates of return. These are hardly fortuitous circumstances for our economy."
Fisher says it's likely we'll suffer anemic growth for the next couple of quarters. He says the third quarter is off to a weak start.
"In 2001, we sold $1.1 trillion in goods to satisfy our foreign customers. The shipment of goods in vital to the future of Texas. We are the largest exporting state—I'm proud to tell you that. We've pulled ahead of California. And in no insignificant part, that's due to the great Port of Houston. Our nation's comparative advantage in global markets increasingly lies not in goods, but in the service sector. The most recent data shows service exports are running at about 17 per cent ahead of last year at this time, and they've been growing at a rate of 12 per cent per annum for at least the last five years."
Fisher says he hopes both presidential candidates and both political parties realize that the future depends on growing the U.S. share of the global market for services.
Ed Mayberry, KUHF Houston Public Radio News.