ECONOMIC INDICATORS

R.I. one of states hardest hit by recession, says Fed’s Rosengren

BLOOMBERG FILE PHOTO/BRENDAN HOFFMAN
ERIC ROSENGREN, president of the Federal Reserve Bank of Boston, said Rhode Island was one of the states hardest hit by the recession and continues to be one of the slowest to recover.
Posted 1/15/13

PROVIDENCE - Rhode Island was one of the states hardest hit by the recession and continues to be one of the slowest to recover, Federal Reserve Bank of Boston President Eric Rosengren said Tuesday at a meeting of the Greater Providence Chamber of Commerce.

That’s no surprise to Rhode Island business leaders, many of whom took Rosengren’s economic outlook as a positive indicator, despite the slow national recovery and the even more sluggish climb toward economic health in the Ocean State.

“That’s nothing dramatically different. Historically, Rhode Island is slower going into a cycle and slower coming out of it,” Alden Anderson, a partner in the commercial real estate firm CB Richard Ellis, told Providence Business News.

“What’s important from this economic outlook is that we should start to see some impact on the local level,” Anderson said. “And he pointed out the value of our medical and educational institutions, and the role they can play in our future.”

According to Rosengren, the nation’s slow but steady gains in housing and in purchases of automobiles and durable goods – such as refrigerators and TVs – are positive and will bring jobs to varied skill levels nationwide. New England, however, is not going to be competitive for businesses like automobile plants because of the high cost of living, Rosengren said.

“Don’t focus on jobs where New England doesn’t have the cost advantage. Focus on spillover from good universities and jobs in engineering, the medical field and business,” said Rosengren.

Rhode Island’s 10.4 percent unemployment rate is evidence of the severe impact of the recession the state continues to suffer, particularly for the long-term unemployed, he said. The national unemployment rate is 7.8 percent.

In order to boost employment, attract new business and convince professionals in medicine and education to locate and remain in Rhode Island, the state has to begin making improvements at an earlier level of education, said David Frieder, an architect with SMMA, a firm which is based in Cambridge, Mass. and has a Providence office. SMMA has done extensive work with public schools, Frieder said.

“The focus on ‘meds and eds’ is important,” said Frieder, who supports Rosengren’s perspective on highlighting the state’s positive sectors to attract new business. “But focusing on universities is from the top down, and the focus on education in Rhode Island needs to be from the bottom up – on improving K-12 education.”

Greater Providence Chamber of Commerce President Laurie White said she takes Rosengren’s economic outlook as a positive sign the economic recovery will pick up steam in Rhode Island.

“The improvements in durable goods and housing will start to generate jobs at all levels in Rhode Island,” said White. “We’ve known all about the ‘knowledge economy’ we’re building in Rhode Island, and the chamber and leaders in the state are focused on stimulating growth in that area.”

Rosengren said the Federal Reserve plans to keep interest rates low until the nation gets to the threshold of 6.5 percent unemployment, a sign that the recovery will have gained significant strength to withstand any adjustments.

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