Of course, there is the physical damage, which was geographically widespread, but particularly devastating in some communities right here in New York City, including Breezy Point, the Rockaways, and portions of Staten Island, and in so many cities and towns along the Long Island, New Jersey and Connecticut waterfronts, such as Long Beach, Seaside Heights, Spring Lake and Hoboken. Estimates of the costs of disruption to economic activity – that is, services that couldn’t be rendered and goods that couldn’t be produced because of protracted transit shutdowns, power outages and other such damage produced by the storm – are particularly difficult to pin down. Thus, it will be some time before concrete figures are available. However, the early read from recently-released data confirm these disruptions have been widespread. Every one of the New York City area firms that responded to our recent Empire State Manufacturing Survey – fielded one to two weeks after the storm – indicated that the storm disrupted activity at their firm, and 40 percent of them indicated that they were completely shut down or severely crippled for at least five days. Furthermore, the number of workers filing initial claims for unemployment insurance in both New York and New Jersey surged to more than triple their pre-storm levels in the week after Sandy hit, suggesting at least 70,000 storm-related job losses in these two states thus far. These data suggest that the disruptions that we have seen, and continue to see, could be substantial.
This diversity of viewpoints is a key strength of the FOMC. In fact, I believe we make better decisions as a committee because we don’t all think alike. But we are united in our commitment to our dual mandate of maximum sustainable employment and price stability and in our belief that preserving the independence of the Federal Reserve in making monetary policy decisions is very much in the public interest. That independence allows us to make tough decisions based on data and analysis – insulated from short-term political considerations. At FOMC meetings, each Committee member presents a current outlook for his or her District and for the nation. In formulating these assessments, we consult with many sources – our boards of directors, regional advisory councils, community leaders and other key stakeholders. My meeting with you today is part of this systematic effort to understand what is going on at the grassroots level of our economy. To add to what I learn from my conversations, my colleagues and I at the New York Fed continually track conditions in our District, and we have created special tools for that purpose. For example, my staff tracks local household credit conditions, including the amount and type of personal debt and whether repayments are timely. We also conduct a periodic poll about the credit needs of small businesses, which are an important source of new jobs in the District.