However, growth in New York State has slowed, and Puerto Rico’s economy is not faring well at all; the activity index produced by the Government Development Bank for Puerto Rico shows that the Island’s economy has yet to show any signs of bottoming out. The job situation has varied somewhat across our region. Improvement has generally been broad-based, with New York City and Long Island doing particularly well, though Puerto Rico continues to weaken. Both Connecticut and New Jersey have recently been growing roughly in line with the nation thus far in 2013. Unemployment rates across the region are roughly matching the national rate, with the exception of the relatively high rate that has characterized Puerto Rico’s labor market for some time. Housing continues to be a focus of our regional monitoring efforts and home prices in our region appear to have bottomed. Our economists will elaborate on these points this morning. Are recent college graduates finding good jobs? The special topic of today’s press briefing is a look at how well recent college graduates are faring in the job market, both nationally and here in our region. A college education represents an important investment in one’s human capital, meaning the knowledge and skills people build. Historically, it’s been pretty clear that those who’ve invested in a college education have tended to earn a sizeable economic return. And the benefits of collegeeducated citizens go well beyond the individual.
Although the unemployment rate has declined by 2.5 percentage points from its peak of 10 percent in October of 2009, much of this decline is due to the fact that the labor force participation rate has fallen by 1.5 percentage points over this period. Recall that discouraged workers who do not actively look for work are regarded as not participating in the labor force and so are not counted as unemployed even though they are without jobs. Using an alternative measure, the employment to population ratio, which is not influenced by changes in the number of discouraged workers, there has been limited improvement in labor market conditions. Job loss rates have fallen, but hiring rates remain depressed at low levels. Taken together, the labor market still cannot be regarded as healthy. Numerous indicators, including the behavior of labor compensation and household assessments of labor market conditions, are all consistent with the view that there remains a great deal of slack in the economy. That being said, I see persuasive evidence of improved underlying fundamentals for much of the private sector of the U.S. economy. Key measures of household leverage have declined and are now at the lowest levels they have been in well over a decade. Household net worth, expressed as a percent of disposable income, has increased back to its average of the previous decade, reflecting rising equity and home prices and declining liabilities. Banks are beginning to ease credit standards somewhat after a prolonged period of tightness.