Fed’s Parry: ports shutdown could cost $2 billion a day

The Associated Press
Thursday October 03, 2002


SAN FRANCISCO — The economic impact of the work stoppage along the West Coast ports is accelerating, and could cost the economy $2 billion a day if it continues after Thursday, said Robert Parry, president of the Federal Reserve Bank of San Francisco. 

“If this gets resolved immediately, then I think the impact on the national economy is pretty minimal. But if shipments in and out of ports here are interrupted much longer, the drag on the economy would be more significant,” Parry told a gathering of security analysts on Wednesday. 

California’s high-tech industry has been spared somewhat, because “a lot of it is handled by airplane — that helps a little bit,” said Parry, who arrived at the $2 billion figure after consulting with research firms and other economists. 

Parry focused his speech on broader economic developments, predicting that growth will be uneven coming months, and that current interest rates should support an expansion in economic activity. 

“We’re now in the midst of an expansion that’s both modest and uneven” as growth lurches from growth to weakness on a quarterly basis, Parry said. 

“It’s likely that the economy’s growth rate will continue to bounce around in the last half of the year,” with a strong third quarter and slower advance in the fourth, Parry said. 

Parry is a nonvoting member of the Federal Open Market Committee, which sets interest rates. In a meeting last week, the central bank left its overnight interest rate target steady at 1.75% and warned of the possibility of future economic weakness.