Rising dollar to curb US exports-former NBER chief
NEW YORK (Reuters) - The former head of the U.S. National Bureau of Economic Research said on Friday he expects the recent strength in the dollar will make it tougher for U.S. exports to grow.
The dollar's rise against the euro "is going to make it harder for U.S. exports to expand," Martin Feldstein, who is now a professor at Harvard University, told CNBC television.
A resurgence in the dollar against the euro and other major currencies dimmed the prospects for U.S. exports, the lone bright spot in a sputtering economy, according to Feldstein.
Since mid-July, the euro has lost about 10 percent against the dollar; it last traded at $1.4230 early Friday. An index tracking the dollar against a basket of world currencies has risen 9 percent during the same period.
Feldstein repeated his view that the United States has been sliding into recession since the beginning of the year.
Various indicators on construction, production, sales and employment portend the economy will contract, he said.
On Friday, the government reported U.S. private and public employers reduced payrolls by 84,000 in August, more than the 75,000 forecast by analysts. The jobless rate jumped to 6.1 percent, the highest since September 2003.
Asked whether U.S. growth will slow to 0 percent or turn negative, Feldstein replied, "I think we are."
Moreover, the credit crunch has remained a drag on the housing sector and financial markets, he said.
"The fact (is) that lenders don't want to lend, asset buyers don't want to buy assets because of this tremendous uncertainty on what mortgage-backed (securities) are actually worth," he told CNBC.
The National Bureau of Economic Research is a private research group known for identifying when the economy goes in and out of recession. Most of the recessions the group called consist of two or more quarters of economic contraction or negative gross domestic product.
James Poterba was named the head of the bureau earlier this year, succeeding Feldstein.
(Reporting by Richard Leong and John Parry; Editing by Jonathan Oatis)
