U.S. consumers are going to continue to feel pain until housing prices stabilize, even though global growth remains mostly strong, General Electric Chairman Jeff Immelt said.
Immelt made the comments as GE announced an $8 billion partnership with Abu Dhabi investment agency Mubdala Developmentthat he said would allow the conglomerate to expand its operations into strong growth markets.
In a live interview on CNBC, whose parent company is GE , Immelt said both consumers and business face hard times ahead in the U.S.
"I would say the global growth continues, the infrastructure growth continues," he said. "The US consumer is still in a tough place and I think you see that as earnings come in."
Much of the stress is coming from real estate prices that haven't leveled off yet. Home prices extended their slide in May with a 0.3 percent decline from the previous month, the Office of Federal Housing Enterprise Oversight said Tuesday.
"Housing prices are still declining. I still think there's going to be some tough times ahead vis-a-vis the US consumer," Immelt said. "I think most of that has been factored into the market and to the planning of financial services companies.
"But the global economy, we just don't see a slowdown in infrastructure and we don't see a slowdown in the global economy, and I'm quite heartened by the fact that those areas continue to be very robust."
Immelt also called for a far greater US effort toward renewable energy sources as the economy gets squeezed by skyrocketing fuel costs. He said the nation and the world should be looking at a variety of alternatives and the US should strive for 20 percent of its energy to be renewables by 2020.
"We ought to be betting on a multitude of technologies--gas, coal, nuclear, renewables," he said. "I think things like wind and solar are very important."
He said the country ought to be investing much more heavily in developing alternative energy sources.
"The amount of money that's been spent in R&D in energy in the past 25-30 years is a joke, and now we have to ramp up technolody and R&D in the future," Immelt said. "Renewables have to be in the lead and nuclear power and things like that have to come along with it."
