Thus, although the financial strains on many families in the region remain severe and are very troubling to me, they do show some signs of abating slowly outside of Puerto Rico. Impact of the great recession on public schools in the region Now, I will turn to our special topic. In an important sense, schools constitute the backbone of our national and regional economy. Yet, this backbone can be vulnerable during recessions. Schools teach our citizens skills, including how to read, write, do math, create art or music and work in teams. Economists call these skills “human capital” because they are an important input that fuels a nation’s or region’s economic growth and development. In this way, schools play a key role in shaping our future. Therefore, it is essential to understand how the Great Recession has affected our ability to educate the next generations of students. Thus, today, we will examine how the recession has affected funding levels for schools in our region. As you know, there is an ongoing vigorous debate about how to most effectively organize public education and provide incentives to teachers, students and administrators. Such inquiry is key to any effort to ensure the best possible education for our citizens, but it is beyond the scope of this briefing. 3  For a more information, see “An Introduction to the FRBNY Consumer Credit Panel,” New York Fed Staff Report No. 479, November 2010. For the recent releases from the panel, see U.S. Credit Conditions.
In New Jersey, private-sector job growth was quite robust in the fourth quarter, despite a small dip in December. New York State, in contrast, slowed more in December and has seen only minimal job gains since we last met in August. 2  For more information, see Indexes of Coincident Economic Indicators on the New York Fed website. BIS central bankers’ speeches  3  Job growth in the region no longer appears to be out-performing the nation, and regional unemployment rates remain unacceptably high: at around 9 percent in both New York City and New Jersey, and close to 8 percent across New York State. Turning to New York City, the local job market, which had been quite resilient during and after the recession, has lagged recently – partly reflecting weakness in the city’s securities industry. Still, the Big Apple has recovered over half of the jobs lost during the recession, whereas the nation has recouped only about a third of its job losses thus far. Despite recent weakness in the securities industry, other industries, such as tourism, and professional and business services, have fared reasonably well in the City. Weakness in financial activities industry – and securities in particular – is worrisome because this sector has tended to drive overall local growth and provide a major source of tax revenue for the city and the state. The New York Fed also conducts the Empire State Manufacturing Survey to track conditions for regional manufacturers.