by Karen Brune Mathis
Managing Editor
Jacksonville’s Federal Reserve Bank regional executive assured civic leaders that the economy has been improving.
“The news is getting better,” said Christopher Oakley, vice president and regional executive of the Jacksonville Branch of the Federal Reserve Bank of Atlanta.
“We do expect the economy and employment to grow at a moderate pace,” he said.
His presentation summary page stated that the economy is expected to continue growing at a modest pace for the next two years.
Oakley presented an economic update and outlook to The Civic Round Table of Jacksonville Friday at the Crowne Plaza Downtown.
“The recession ended quite awhile ago,” said Oakley. “It does appear that private demand has some durable momentum.”
Last year this time, he said, the economy was bolstered by government spending. Now, he said, the private sector is filling the void.
The Federal Reserve System is the nation’s central bank and is based in Washington, D.C.
It was created in 1913 when President Woodrow Wilson signed the legislation and earned his place as the face on the $100,000 note.
The Fed makes monetary policies to stabilize prices and moderate long-term interest rates. It also regulates banks for safety and soundness.
Its history has roots in the area. The draft legislation for the creation of a U.S. central bank resulted from a 1910 meeting in Jekyll Island, Ga. Parts of the draft were incorporated into the 1913 Federal Reserve Act.
The Federal Reserve Banks consist of 12 regional banks. The regional Atlanta Federal Reserve Bank has five branches in Jacksonville, Miami, Birmingham, Nashville and New Orleans.
About 765 banks and branches in most of Florida, other than South Florida, send their currency to the Jacksonville branch for processing, including destruction and replacement of worn-out bills and detection of counterfeit notes.
“We’re the bank for banks,” said Oakley. The heavily secured bank is along Water Street near the Osborn Center.
The Atlanta Fed collects information and views from its board members and about 1,000 contacts in the Southeast to help analyze the economy and provide to the board as it makes policies.
Oakley told the 25 Civic Round Table participants Friday that the recovery from the December 2007-June 2009
economic recession is on a firmer footing.
Private demand appears to have strengthened, which he said suggests that growth has become more sustainable.
Among the growth points he made during his presentation:
• Consumer spending has improved, driven in part by auto sales, which are up 30 percent from a year ago.
• Industrial activity is strong, with new orders at six-year highs.
• Strong growth in foreign demand for U.S.-made goods has been supporting the manufacturing sector.
• Commodity prices are rising and the share of purchasing managers reporting price increases is at a 2.5-year high.
• Also, commodity prices are being pushed up by rapid increases in global industry activity and supply issues.
• The measures of underlying inflation firmed recently, but remain at low levels.
At the same time, some indicators remain less positive.
• Job gains remain low.
• The unemployment rate has dropped in part because many people have given up looking for jobs.
• The housing market is still depressed.
Oakley said that while inflation is back, it’s not widespread.
“We are seeing some increases in certain places, but not driving through the entire economy,” he said.
He said the price pressures are temporary, but said the Fed is watching the developments.
As for unemployment, Oakley said people looking for work should be aware of the skills needed today.
“The skills necessary to do jobs five years ago are no longer going to cut it,” he said.
Oakley said job seekers must be flexible and bring skills to the position.
As for housing, Oakley provided an index showing that housing prices peaked nationally in the second quarter of 2006 and plunged in the recession to 2003 levels.
Prices nationally haven’t regained a solid momentum upward and scenarios show a potential continued drop.
“Florida has been ground zero,” he said, but added that it is a work in progress.
“I do think we’re working through it.”
356-2466