Regional President Speech

Bullets on New England Economy for Royal Bank of Scotland Directors, 9/27 /95 • The employment and unemployment data show ups and downs in New England in recent months. - In July, employment in the region fell for the third time this year and the region's unemployment rate rose; unemployment subsequently declined in August. - After July losses, the region's total job count was only 0.8 percent ahead of a year earlier, compared with 2.1 percent employment growth over the year in the nation. • The general picture continues to be one of slower growth - slower in the region than nationally - slower in the region and nationally than a year ago. • Among the states, Rhode Island's performance is most troubling - Rhode Island has seen a fairly steady employment downtrend since the beginning of the year, leaving 1 . 1 percent fewer jobs in July 1995 than a year earlier. - Rhode Island's unemployment rate in July was the highest in the region, at 7 .2 percent, and has not improved from a year earlier. • The other New England states: - Connecticut fell below its year-earlier employment level in July; Maine and Vermont lost jobs in July but remained above July 1994. New Hampshire's job tally was level in July - Only Massachusetts showed clear gains in July employment and it has gained more than any other New England state over the year (up 1 .6 percent). • Most New England industries lost jobs in July, but services and wholesale/retail trade were the exceptions - Services and trade, along with construction, show the fastest growth in the region over the 12 months ending in July (construction up 3.0 percent, services 2.0 percent, and trade 1.2 percent). - By contrast, the finance/insurance/real estate industry is barely ahead of a year ago, and government, transportation/public utilities, and manufacturing are down. - Manufacturing job losses in the last year have been concentrated in the region's transportation equipment and instruments industries; instruments jobs have also been cut back nationally. • Defense cutbacks are certainly part of the reason for continued manufacturing job losses. - Not only is New England industry employment more concentrated in defense, but most of the New England states (including especially defense-dependent Connecticut and Massachusetts) registered greater declines in defense-intensive industry employment than the nation as a whole. • Unemployment declined in August in the nation and New England, to 5.6 percent and 5.4 percent, respectively. -In July, unemployment rates rose in all six states, but remained below year-earlier levels, except in Rhode Island. • Existing home sales declined more in the region than in the nation over the four quarters ending in June, but the second quarter showed a slight improvement. • New housing construction has slowed in the region; housing permits are down in New England but up nationally. • Several measures of business confidence in New England show marked improvements in the summer, although all remain below peaks earlier this year. • Retail sales declined in June in New England and Massachusetts, but remain slightly above year-earlier levels. New England's 0.5 percent rise from June 1994 contrasts with a national gain of 6.3 percent. • Help-wanted advertising in the region gained in June and July and the confidence of New England consumers rose in July and August. .. New England Economic Conditions Prepared by The Federal Reserve Bank of Boston September 27, 1995 Chart 1 Nonfarm Payroll Employment by Census Region Index, Each Region's Employment Peak = 1 1.25 Mountain ---------------------------------------------------------------------- 1.20 1.15 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - West So. Central East So.Central 1.10 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - West No. Central Pacific exc. CA South Atlantic .-- East No. Central 1.05 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Pacific 1.00 0.95 New England 0.90 ----------------------------------- -------------------------------------------------~-- 0.85 Jul 88 Jan 89 Jul 89 Jan 90 Jul 90 Jan 91 Jul 91 Jan 92 Jul 92 Jan 93 Jul 93 Jan 94 Jul 94 Jan 95 Jul 95 Jan 96 Jul 96 Jan 97 Source: U.S. Bureau of Labor Statistics. Chart 2 Nonfarm Payroll Employment in New England and the United States Index, Each State's Employment Peak = 1 1.08 ·United . _ ---------------------------------------------------------------------- 1.06 States 1.04 ------------------------------------------------------------- 1.02 ------------------------------------------------------- ---.~ - ~' -------- Vermont ----------- --------------------- 1.00 -- Maine New 0.98 Hampshire 0.96 Massachusetts- - 0.94 Rhode Island ---~ ----------- 0.92 Connecticut 0.90 --------------------------- 0.88 ----------------------------------------------------------------------------------- 0.86 Jul 88Jan 89Jul 89Jan 90Jul 90Jan 91 Jul 91 Jan 92Jul 92Jan 93Jul 93Jan 94Jul 94Jan 95Jul 95Jan 96Jul 96 Source: U.S. Bureau of Labor Statistics. Chart 3 Nonfarm Payroll Employment Index, 1989 Q1 = 1 1.10 United States 1.05 1.00 0.95 0.90 0.85 1....-J, ..__ ___.__ __ ____..__ __ ..,__ __ ___.__ __ _._ __ .....J Jan 88 Jan 89 Jan 90 Jan 91 Jan 92 Jan 93 Jan 94 Jan 95 Source: U.S. Bureau of Labor Statistics. Chart4 Unemployment Rate Percent 10.0 9.0 8.0 7.0 United States 6.0 5.0 4.0 3.0 2.0 Jan88 Jan 89 Jan 90 Jan91 Jan92 Jan93 Jan94 Ja~95 Note: Data beginning January 1994 reflect the redesigned CPS survey and are not strictly comparable to data for 1993 and earlier years. Source: U.S. Bureau of Labor Statistics. Chart 5 Unemployment Rates in August and July 1995 and July 1994 Seasonally Adjusted 5.6 United States 5.7 5.4 New England 6.o ---------------------' 6.1 5.3 Massachusetts 5.7 Connecticut 5.3 1-------------------'-_J 5.4 Maine 6.2 7.3 New Hampshire 3.9 4.6 Rhode Island 7.2 7.2 Vermont 4.2 4.6 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 Percent Source: U.S. Bureau of Labor Statistics. Chart 6 Sources of Employment Growth by Sector Index, 1989 Q1 = 1 Index, 1989 Q1 = 1 1.30 -----------------------, 1.10 ,-------------------------. Services Retail and Wholesale Trade 1.25 1.05 1.20 United States 1.15 1.00 1.10 0.95 1.05 New England 1.00 0.90 0.95 0.90 U...--..L--__;1--_ _ _,__ _. ..1- __ ..1.-_--JL---.....L.---' 0.85 L.L.--""'------l..__ _ _,L, __ -1.- __ .,__ _ __. __ --1-_-.1 Jan 88 Jan 89 Jan 90 Jan 91 Jan 92 Jan 93 Jan 94 Jan 95 Jan 88 Jan 89 Jan 90 Jan 91 Jan 92 Jan 93 Jan 94 Jan 95 Index, 1989 Q1 = 1 Index, 1989 Q1 = 1 1.05 ,------------------------, 1.10 Manufacturing 1.00 1.00 0.90 0.95 0.80 0.90 0.70 0.85 0.80 0.80 0.50 LL--..L..--L---.J.----'---..L..--L----'-----J 0.75 ........_ _ . ..1,_ __ L_._ _ _,__ _. ..1---..&.---L.....-.....L.---' Jan 88 Jan 89 Jan 90 Jan 91 Jan 92 Jan 93 Jan 94 Jan 95 Jan 88 Jan 89 Jan 90 Jan 91 Jan 92 Jan 93 Jan 94 Jan 95 Source: U.S. Bureau of Labor Statistics. Chart 7 Current Economic Indicators Help Wanted Advertising Index Consumer Confidence Index 1986 = 100 Index 1967 = 100 180 ...-------------------, 160 - - - - - - - - - - - - - - - - - - - - - - - - - - - 140 140 120 100 80 100 60 80 40 60 ~ --------------------------- 0 L.Lu.w.wu..u.1.J.w.w...w.J..w.w.WJ.1.1.w.w..w..i.w=w.w.U.U.U.w.u.L.W.Ll.. ........ w,.ucw.....l 40 L..W.W.Ww.LU.U..U.UuuJ.I.W.Ww.uJ.LI.UJ.<.W..U. ........w .w.J..Lw.w..i..w.w.u.w..o.w.ww....l Jan.as Jan-89 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-96 Jan-a& Jan-89 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-96 Retail Sales Housing Permits Index 1984 Q4 = 1 Index 1984 Q4 = 1 1.9 .--------------------, 1.6 ,-------------------, _________________________ May 1.8 1.4 13 ---------------------- - 1.6 1.6 1.4 1.3 1~ ---------------------------- 1.1 L.J..u..u.u=u.w.w. ..........J ..w.LJu.u.&.1ili.wU..U.U.....,_.u.u.&.I.W.WW.W. .................. W.U.. ............ 0.2 L..WJJ.W.u..u.1.J..W.W...w.l..L.W.LiW. J.IJ.W.W. ........u .u.u.W.W.U.U.UL.W.LIW. .W.W.WJ.i.w.w...J Jan-88 Jan-a9 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-96 Jan-88 Jan-89 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-96 Average Hourly Earnings Consumer Price Index Percent Change from Year Earlier Percent Change from Year Earlier 7.-------------------, 8.-------------------, 6 6 6 4 United States 3 ------------- 2 -------------- 1 ---------------------------- 1 ---------------------- 0 L.Lu. ........w .w.=J.Lu.w.l ......... UJ..WW.W.W.W. ......W .W.u.J;.o.U...W.w.JJ.w.w"'-UJ.w.w.W 0 ................. w.w.=J.Lu.w.l.w.wu..u.u.w.wu..u.uili.wL.W.LI.W.U., ........... w.w. ........w .w ......... L.J Jan.as Jan-89 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-96 Jan.as Jan-89 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Source: New England Economic Indicators, Federal Reserve Bank of Boston.

Cathy E. Minehan (1995, September 26). Regional President Speech. Speeches, Federal Reserve. https://whenthefedspeaks.com/doc/regional_speeche_19950927_cathy_e_minehan

@misc{wtfs_regional_speeche_19950927_cathy_e_minehan,
  author = {Cathy E. Minehan},
  title = {Regional President Speech},
  year = {1995},
  month = {Sep},
  howpublished = {Speeches, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/regional_speeche_19950927_cathy_e_minehan},
  note = {Retrieved via When the Fed Speaks corpus}
}