Based on the experiences of Japan in the 1960s and Korea in the 1980s, emerging Asia’s energy and metals intensities should gain momentum.4 Rapid urbanization underpins this growth. Since 1990, the number of people living in cities in China and India has risen by nearly 500 million, the equivalent of housing the entire population of Canada 15 times over (Chart 4).
Households surely won’t be able to maintain spending growth indefinitely without renewed gains in employment, and a pickup in job creation will require that businesses become more sanguine about their future profit opportunities. At the Federal Reserve, we will continue to weigh incoming data and changing forecasts.