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Federal Reserve Official Predicts More Unemployment

U.S. unemployment likely will still be above 7 percent by the end of 2014, a top U.S. banking official said during a conference at Penn State Erie, The Behrend College.

Federal Reserve Official Predicts More Unemployment

Sandra Pianalto

The slow pace of the nation’s economic recovery could force the Federal Reserve to take more action, said Sandra Pianalto, president of the Cleveland Federal Reserve Bank. But regulators have few options left: The federal funds rate – the overnight rate that banks charge each other – already is near zero.

“Uncertainty seems to be the watchword today,” said Pianalto, the keynote speaker at the July 17 conference of the Economic Research Institute of Erie.

Part of the problem – and the focus of the conference, which drew nearly 200 people to the Jack Burke Research and Economic Development Center – is a skills mismatch: an excess of job candidates who are not qualified for today’s open positions.

“There’s an undervalued respect for the trades,” said Aldo Jackson, director of the Erie County Technical School.

Often, it begins at home. “Families spend more time picking out a refrigerator or a microwave than they do talking with their children about career opportunities,” Jackson said.

Erie County has seen job growth, particularly in the areas of education and health care, said Jim Kurre, associate professor of economics at Penn State Behrend and director of the Economic Research Institute of Erie. Manufacturing also has rebounded. But Erie’s per capita income is still 17 percent lower than the national average.

“That’s kind of Erie’s story,” Kurre said: “Growth, but at a slower pace than the nation.”

That, in turn, can limit the opportunities for Erie workers, Penn State Behrend Chancellor Don Birx said.

“We’ve been moving down the supply chain,” Birx said. “We have less and less intellectual property of our own.”

He hopes to find answers in the “open lab” concept, which encourages partnerships between businesses and the universities near them. Others at the conference touted different initiatives: the Erie Regional Chamber and Growth Partnership’s “Project Jobs” campaign and a high-school welding camp backed by manufacturing firms in Mercer County.

Some workers will still be left out, however.

“There’s no magic wand or Band-Aid,” said State Sen. Jane Earll, who joined Birx and others for a panel discussion. “I’m kind of sitting here shaking my head. You’re presented with so much data and so many statistics, but I’m not sure we are solving the problem.”

 

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