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Somerset, NJ — While New Jersey’s economy has made significant progress since the recession, the state faces “different issues than other states” that impact the recovery of its housing and labor markets, Federal Reserve Bank of Philadelphia President Patrick T. Harker said today in remarks at the New Jersey Bankers Association’s annual Economic Leadership Forum.
Harker explained that the concentration of workers in uncompetitive industries has had a hand in slow job growth, and the large foreclosure inventory is restraining the housing market. “We are faced with the simple math that when you’re hit harder, you have more ground to make up, and it takes longer to recover,” Harker said. “Add in the state budgetary pressures and the recent downgrade of the state credit rating, and the concerns of the people in this room look entirely different than those of other states’ bankers associations.”
On the national scale, inflation, GDP growth, and the labor market are “displaying considerable strength” and indicate a robust American economy, Harker said. Inflation is “on course to meet our target sometime this year or next,” and “GDP continued to grow in the third quarter at an even faster pace than in Q2,” Harker said. If the economy continues to perform well in 2017, Harker said that “three modest rate hikes” would be “appropriate” in 2017.
The Federal Reserve Bank of Philadelphia helps formulate and implement monetary policy, supervises banks and bank savings and loan holding companies, and provides financial services to depository institutions and the federal government. It is one of the 12 regional Reserve Banks that, together with the Board of Governors in Washington, D.C., make up the Federal Reserve System. The Philadelphia Federal Reserve Bank serves eastern Pennsylvania, southern New Jersey, and Delaware. Read the speech.