Tags: Fed | Plosser | Europe | US

Fed’s Plosser: Europe Noise Drowns Out Good US News

Friday, 02 Dec 2011 01:53 PM

Good news is hitting the wires in the United States although default fears in Europe are drowning it out, says Federal Reserve Bank of Philadelphia President Charles Plosser.

Unemployment is falling, Plosser told CNBC just before the release of November's jobs report, which showed the economy added 120,000 net nonfarm payrolls in November.

And while the economy isn't roaring back to life, another recession is unlikely, he says. Yet U.S. markets are roiling on fears that one or more European countries will default and bring the eurozone down with them.

"You watch the markets day to day and week to week since July sometime, it seems to be almost entirely driven by what was the news from Europe today," Plosser told CNBC.

"In fact, a lot of the good news about the U.S. economy, the domestic economy, got sort of washed away in the wild speculation about things that are going to happen in Europe."

Fresh bad news hit the airways when the United Nations warned the global economy could come to a screeching halt if Europe doesn't deal with its debt crisis quickly.

Should European leaders fail to prevent a member state from defaulting on its debt, the United States and Europe will plunge back into recession and the world economy will only grow 0.5 percent next year, according to UN forecasts, Bloomberg reports.

"There is a danger that the unthinkable is now thinkable," says UN chief economist Rob Vos, Bloomberg adds.

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Good news is hitting the wires in the United States although default fears in Europe are drowning it out, says Federal Reserve Bank of Philadelphia President Charles Plosser. Unemployment is falling, Plosser told CNBC just before the release of November's jobs report,...
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2011-53-02
Friday, 02 Dec 2011 01:53 PM
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