New York Fed chief sees positive development in China's economy

The global economic outlook appears less problematic than it did just a few months ago, and China has achieved positive development in its economy, said William Dudley, president and CEO of Federal Reserve Bank of New York, Thursday.

During a speech at the Economic Club of New York, Dudley said China's transition to a more balanced growth path appears to be underway, as evidenced by stronger domestic consumption and less emphasis on investment.

And he said he believed that Chinese authorities have a range of tools at hand to support the economy during the transition.

The New York Fed chief also noted many positive aspects in the U.S. economic outlook, including the steadily growing domestic demand.

Increases in consumer spending, housing and business fixed investment all contributed to the third quarter's 2.9 percent annualized gain in real domestic final sales, he said.

Moreover, the fundamentals supporting domestic demand look quite sturdy, he said. For example, consumer spending has been well supported by real income gains and rising household net worth, he added.

Housing fundamentals are solid as well, said Dudley, citing that recent payroll gains have supported household formation and mortgage rates remain low.

Noting that housing prices are rising and building contractors struggle to mobilize the resources needed to construct more homes, he said the gradual improvement in the housing sector is expected to continue.

The U.S. economy looks to be in decent shape and is likely to continue to grow at a slightly above-trend pace, he said. Endit