The National Accounts show that productivity on average fell by 0.5 per cent in the first three quarters, compared with the same period in the previous year. The downturn was broad and covered almost all sectors. The Riksbank was therefore forced during the course of last year to revise down its short-term productivity forecast. One important explanation for the slowdown in the productivity increase is linked to cyclical developments. When the economic cycle has peaked, productivity usually slows down. The Riksbank assumed in the third and the year’s final Inflation Report in October 2006 that GDP would increase by 3.1 per cent in 2007 and that employment would increase by 1.1 per cent in 2007. In the most recent Monetary Policy Update published in December 2007 the GDP increase was calculated at 2.6 per cent and the increase in employment was calculated at 2.5 per cent for the whole year 2007 (see Figure 6). Employment has thus continued to increase more quickly than we had estimated, while GDP growth has slowed down. The fact that employment is increasing can thus be regarded as natural in this phase of the economic cycle, but the increase has been unexpectedly rapid, which is possibly a reaction to the weak growth in employment during the first years of the 2000s. There are also other factors that may have contributed to the severe slowdown.
William C Dudley: The national and regional economic outlook Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Center for Economic Development, Syracuse, New York, 12 April 2012. *  *  *  Good morning, I am pleased to be here in Syracuse at the Center for Economic Development. It is always a pleasure to speak with business and community leaders because of the important role you play in helping to shape the economy of the region. I thank you all for inviting me here today. I try to get out of my office in New York City as much as I can to get a sense of regional economic conditions across the second Federal Reserve District. I was last here in Syracuse in 2010 and, more recently, I traveled to West Point and the Capital region and Long Island. These visits are just as important as any trip I might take to Washington, D.C., to help formulate monetary policy, or to Switzerland, to help shape international bank regulation. Each visit within the region helps me to deepen the relationships with the people I represent. I believe that the understanding of issues and concerns that I gain today will help ensure that the Fed’s policy decisions reflect the public interest. Today, I want to talk a bit about the Fed – what we do and why we do it. Then I’ll provide some thoughts about the economic outlook nationally and locally.