Federal Reserve official says Upstate recovery will take time
The recession may be over, but Upstate New York's recovery may move more slowly than other regions of the United States. That's the message from a top official of the Federal Reserve during a stop in Syracuse. YNN's Bill Carey has the story.
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SYRACUSE, N.Y. -- When it comes to monetary policy in the United States, he is one of the key players. William Dudley serves as President of the Federal Reserve Bank of New York, one of the 12 central banks that determine how much money is in circulation and how much banks will be charged for that money. His message to business leaders in Syracuse was that the economy is recovering, .but slowly.
“The patient was in the emergency room. Then they were in ICU. Then they were in the hospital. Now, they're at home recovering,” Dudley said.
But while the signs are positive for a recovery from the long recession, here in Upstate New York, there are also signs that the recovery here may come more slowly.
Dudley said, “The demographics of this region are quite different. Population growth is much slower, so there's much less vibrancy in terms of job creation. So there is a recovery taking place in the region, but it's a slower recovery than what we're seeing in the nation as a whole.”
Dudley tells Upstate decision makers that the key to real growth is to forge more ties between business and researchers in the state's colleges and universities, generating new ideas and, eventually, new jobs. Not all the news is positive. A rebound in consumer buying has been slowed by rising costs at the gas pump.
“There's no question that the higher gas prices are a negative because, obviously, it crimps the amount of money that people have available for other goods and services. And so, to the extent that they don't have that money available, that makes the economy somewhat weaker,” Dudley said.
And there is still a need to encourage more borrowing by the banks and by business to increase productivity and output. For now, don't expect any major changes in Fed decision that have kept interest rates low.
“We need to see more rapid growth for a sustained period of time, to absorb the excess slack in the economy, before we can really start to talk about moving toward a more normal interest rate environment,” Dudley said.
The New York Fed leader says there is no expectation of interest rate increases through at least the end of 2014.
The Federal Reserve Bank of New York is responsible for an area covering all of New York State, as well as northern New Jersey, southwest Connecticut, Puerto Rico and the U.S. Virgin Islands.