I know I will fall short in fully acknowledging all the hardship that our fellow citizens have endured – including devastating losses of loved ones, homes, communities and livelihoods – as well as widespread misery caused by flooding and disruptions to power, fuel, food, transportation and other services across the region. Nor will I be able to fully commend the ways in which family members, neighbors, co-workers and strangers have helped those in need. I am deeply moved by the evidence of people reaching out and pulling together across the region. At the New York Fed we are committed to supporting the recovery process. In addition to our economic analysis, we are convening our advisory groups and other regional contacts to receive first-hand accounts of the impact on communities, families and businesses and to assess other ways in which we may help. For example, we are holding a clinic in Staten Island to help people obtain information about different types of financial support that is available. We’re also encouraging banks to show appropriate flexibility when dealing with small business and other borrowers impacted by the storm. After my remarks, I’ll be happy to answer any questions you have about what the Fed does and why, and about the economic outlook. But I won’t comment specifically on the upcoming FOMC meeting next month. As always, what I have to say reflects my own views and not necessarily those of the Federal Reserve System or the Federal Open Market Committee, also known as the FOMC.
The storm shut down all New York City schools for a full week, and many schools across the region remained closed the following week. Hardships borne by students and families are also reflected in record low post-storm attendance rates. The New York City Department of Education moved quickly to relocate schools from damaged buildings to temporary premises, enabling children to resume their studies. But even two weeks after the storm, schools that had to be relocated had attendance rates below 70 percent, a huge drop from their regular rates of over 90 percent. Research shows that lost school days and relocations can significantly impair student learning. The good news is that the situation is getting closer to normal every day. Today, only 9 out of a total of 1,750 New York City schools remain relocated. Also of particular importance is that their leaders – administrators, teachers, principals and others – have agreed to make up three and a half days of the lost time. It is impressive that so many districts across the region are working hard to make up for much of the lost time. Our region must learn the right lessons from this experience. The storm revealed significant shortcomings in the resilience of our public and private infrastructures in three critical areas: power, transport and communications. This vulnerability must be addressed. National economic conditions Turning to the storm’s effects on the national economy, I expect a modest negative effect on the annualized growth rate of real GDP for the fourth quarter of 2012.