The Northeast Berks Chamber of Commerce hosted its annual Federal Reserve 2014 Update breakfast on Friday, Jan. 17.
Presenter Ardy Lynn Wurtzel, Corporate Affairs Research Associate, The Federal Reserve Bank of Philadelphia, showed that over the course of 2013, the economy has seen growth, and projections are for stronger growth in 2014.
“The U.S. economy has continued to grow at a moderate pace,” Wurtzel writes to The Patriot. “Economic growth for the first half of 2013 was subdued by the fiscal tightening, tax rate increases and uncertainty over the economic recovery. Economic growth for the second half of 2013 accelerated.”
She also notes that labor market conditions have exhibited sustained improvement. Inflation remains below the Federal Open Market Committee’s long-run target of 2 percent. “FOMC projections are for stronger growth in 2014 and monetary policy is changing in conjunction with the changing economy and the FOMC forecasts.”
How will 2014 be different or the same when compared to 2013? To the past 3 to 5 years?
“We are entering 2014 on the strongest footing than we have since the recovery began,” she said.
Wurtzel referenced a Jan. 14 speech by Federal Reserve Bank of Philadelphia President and CEO Charles Plosser to the School of Business at LaSalle University, “Plosser expects growth of about 3 percent in 2014. He expects the unemployment rate to continue its steady decline and to reach about 6.2 percent by the end of 2014. Inflation expectations will be relatively stable, and inflation will move up toward the FOMC target of 2 percent over the next year.”
“President Plosser notes that the Fed still faces considerable challenges as it seeks to normalize policy,” according to the speech highlights at http://www.philadelphiafed.org/. “He believes that policy should return to a framework in which a market rate is our primary policy tool, and accordingly, the size of the balance sheet is reduced and restored to an all-Treasuries portfolio.”
Wurtzel hopes that chamber members “gain a basic understanding of how the economy functions and how the different sectors of the economy interact with each other to create a complete picture of our economic environment.”
“The more chamber members understand the mechanics of macroeconomics and the current state of the macro-economy, the better they will be able to understand how the Federal Reserve conducts monetary policy decisions,” said Wurtzel.
The breakfast, held at Kutztown University’s Student Union, Multi-purpose Room, was sponsored by Fleetwood Bank.
About 60 people were in attendance.
“We have the Federal Reserve every January with the outlook of the economy for the upcoming year,” said Chamber Executive Director Tammy Gore. “It really helps attendees plan and know what to expect going forward—they are incredibly accurate with their outlooks.”
Gore said she learned that Pennsylvania was not hit, particularly by the “housing bubble,” nearly as much as the rest of the country.
“As a result, Pennsylvania is above the average for the county in employment figures and Berks and Lehigh counties are even above Pennsylvania’s overall job recovery figures,” said Gore. “The Federal Reserve does not know why our two counties are doing so well, relatively speaking, but suggested that it is a result of the casinos.
I suggest that it is more likely a result of the warehousing/distribution boom along the Rt. 78 and 222 corridors. Ardy Wurtzel took that information down and was going to explore that possibility.”
Gore said Wurtzel also broke down the employment figures by education.
“Those with a college education are unemployed at 4 percent, those without a college degree are unemployed at 14 percent. That is a staggering difference and I think young people need to hear that number when deciding what to do after high school—continuing education, whether trade school or college is instrumental to earning power,” said Gore.
Gore believes it is helpful to have a picture of where we were historically, with 2009 being the bottom of our economy.
“And now look how far we have come, not only as a country, but specifically our local counties,” said Gore. “The Federal Reserve then carries it into the future with what they expect our economy to look like throughout the year and going forward.”