New York Federal Reserve Board President and CEO William Dudley says housing starts recently firmed from depressed levels, but the U.S. economy is ‘not out of the woods yet.’

The Fed chief made those statements in a prepared speech for the Long Island Association in New York.

Dudley said his staff has been providing mortgage information to housing counselors around the New York state area and even developed a resource that can track delinquency and foreclosure conditions in neighborhoods.

Real GDP grew at a 3% annual rate in the fourth quarter, which is the fastest growth rate since the first part of 2010. Consumers also eased back on their frugalness, pushing the sales of motor vehicles higher to an adjusted annual rate of 15.1 million in February.

Still, Dudley said both 2010 and 2011 started with encouraging signs, but ended up facing tough second and third quarters.

He also attributes recent economic activity to mild winter weather, which has a tendency to spur  construction activity levels.

But overall, real economic activity is not strong enough to push the economy back to normal activity levels, Dudley said.

“While it is true that growth was stronger in the fourth quarter, most of that growth was due to inventory accumulation. Growth of final sales was actually quite weak. Historically, a quarter in which inventory investment makes a significant growth contribution is typically followed by a quarter in which that growth contribution is modest or even negative. That appears to be what is shaping up for the first quarter of this year,” he said.

Gasoline prices and economic growth abroad remain ongoing risks to the U.S. economy, Dudley said.

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