Fed: Growth could hit 3% in 2012

SARASOTA — Federal Reserve Bank of Atlanta President Dennis Lockhart sounded an optimistic tone during a presentation Tuesday at New College of Florida in Sarasota.

Lockhart titled his speech "Heart to Heart," in a nod to Valentine's Day. Sticking to the lover's theme, Lockhart told the audience that if “I were thinking of the national economy as a love interest, I'd say she's been rather frisky lately, but I'm wary of being jilted. It has happened before and my heart was broken.”

The translation: Multiple positive signs have developed in the economy the past few months, especially in jobs added, which gives Lockhart hope. But Lockhart and other central bankers thought a positive turn was forthcoming in the economy around the same time last year, too.

Those rosy projections were torpedoed by a series of shocks, says Lockhart. Those shocks include a run-up in oil prices due to the Arab Spring; a spike in commodity prices; and the tsunami in Japan that disrupted global supply chains.

“Not all the recent economic news has been uniformly positive, but the balance of incoming data has been rather upbeat,” Lockhart says. “This gives me confidence in the view that economic growth in 2012 will be noticeably better than in 2011.”

Lockhart says that means that barring any unforeseen shocks, 2.5% to 3% economic growth in 2012 is a reasonable projection.