New York Fed President Talks Shop In Queens

The recent recession hit Queens particularly hard, but the borough’s economy was more resilient than those of Manhattan and many of the nation’s other cities, the president of the Federal Reserve Bank of New York told roughly 400 business, political and civic leaders at the Sheraton LaGuardia East Hotel on Friday.

Employment dipped by roughly 3 percent in the borough, as compared to about 4.5 percent in New York City as a whole and 7 percent nationally, William C. Dudley reported at a business breakfast organized by the Queens Chamber of Commerce and the

“We at the New York Fed see clear indications that employment in Queens stopped declining in the first half of 2010,” said Dudley, a former partner and managing director at Goldman Sachs & Co. “With prospects for the national economy improving in early 2011, the outlook for Queens’ diverse and vibrant economy — and New York City’s as a whole — seems to be brightening as well.

As Queens is home to New York City's two major airports, and the volume of air traffic ranks third highest among U.S. counties, it is no surprise that transportation is the borough’s largest industrial specialty, accounting for 12 percent of total employment, Dudley informed. The other main fields include medical care, construction, printing and a number of manufacturing industries that benefit from being in a large population center.

Dudley, who became CEO of the New York Fed in January 2009, also painted a rosy picture of the national economy, arguing that falling unemployment, rising consumption and growth in the gross domestic product are among the signs that better days are ahead.

“I am pleased to say that the economic outlook has improved considerably in the past six months,” he said. “In my view, the revival in demand, production and confidence strongly suggests that we may be much closer to establishing a virtuous circle that will support stronger growth.”

Dudley envisioned an upward cycle in which rising household and business demand generates income and employment growth, which in turn pumps up consumer confidence and spending.

Nevertheless, a weak housing market and bankrupt state and local governments will probably mean tax increases, and international issues such as unstable oil prices could present stumbling blocks.

“We must not be overly optimistic about the growth outlook,” he warned. “The coast is not completely clear.”

During a question-and-answer session following his speech, Dudley drew some jeers for downplaying the recent spike in consumer prices.

“Today, you can buy an iPad 2 that costs the same as an iPad 1,” he said.

The comment prompted a member of the audience to ask: “When was the last time, sir, you went grocery shopping?”