Federal Reserve Board Chairman Paul A. Volcker said Wednesday that despite weaknesses in the economy, he does not believe that the nation is on the verge of a recession.
Volcker was asked during testimony before the House Foreign Affairs Committee whether, in light of recent low economic growth, the United States was "hovering on the brink of a recession."
"I wouldn't say that," Volcker responded.
Trade Deficit Blamed
But Volcker told the panel:
"Certainly our growth has slowed for more than a year."
Volcker said this slowdown in economic growth was largely the result of the nation's enormous trade deficit, a shortfall that he said he hoped recent declines in the value of the U.S. dollar would help to ease.
But, he added, "I for one do not believe that relying upon exchange-rate changes alone promises a simple and easy solution to the (trade) imbalances."
Volcker, speaking with reporters after his testimony, said the downward revision in the nation's gross national product announced earlier Wednesday by the Commerce Department was further evidence of "the seriousness of our trade deficit."