Since the vast majority of household debt is related to housing, it is not surprising that debtto-income ratios were highest and rose most in places that experienced rapid rises in home prices. So, for example, debt-to-income ratios are among the highest in the nation in those places most associated with the housing bubble, such as California, Florida, Nevada and Arizona. This relationship can also be seen within our region. For example, household debt grew more slowly than nationally and has remained relatively low in upstate New York, which was largely bypassed by the housing boom. The key exception is New York City, where a large share of residents rent their homes. Overall, city residents still have relatively low levels of mortgage debt, even though these debt levels rose during the run-up to the recession. Elsewhere in the region, debt levels tended to rise most in places where housing prices increased the most, such as Long Island and parts of New Jersey. During the crisis, in most parts of our region, households reduced their debts. But, because they had not accumulated as much during the run-up, the decline was well below the national average. In general, households in our region – with some exceptions that I will mention in a moment – have not been under as much pressure to deleverage. It’s particularly notable that in upstate New York, where debt levels are well below the national level, households have actually continued to very slowly add to their debt.
By the way, let me note that this pause occurred before mid-December, so it cannot be attributed to the recent spate of heavy snow storms. 2  BIS central bankers’ speeches  By contrast, New Jersey’s economy has seen no pick-up in activity and, in fact, activity there continued to decline at a modest pace through the end of 2010. We monitor Puerto Rico using an index produced by the Government Development Bank of Puerto Rico. This index shows that the recession there, which started back in 2005 – well before that experienced in the mainland – appears to have subsided. As of November of last year, activity was no longer falling, although indications of a recovery are still mixed. Turning to jobs, the latest data indicate that businesses in the region, on balance, were not expanding their workforces at the end of last year. As a result, the total number of jobs in the region has held steady, lagging behind the job growth rate experienced nationally. Much of this recent weakness in employment stems from job losses in the retail, wholesale and manufacturing sectors in our region. In the rest of the nation, these sectors expanded during the last quarter. Moreover, our state and local governments cut jobs much more severely than governments did elsewhere. At the same time, job gains in some of the region’s strongest sectors – professional and business services, finance, education and health – were not large enough to completely offset these losses.