Fed official speaks at Chamber of Commerce breakfast
Guhan Venkatu apologized for the dark cloud he had cast that was more ominous than anything outside.
“Now that you’re thoroughly depressed …” he said, trailing off – tongue in cheek – at the end of his presentation. “They don’t call this the ‘dismal science’ for nothing. The next time you want to be depressed, I’ll be glad to come here.”
Venkatu, an executive at the Pittsburgh branch of the Federal Reserve Bank of Cleveland, was the featured speaker Friday at the monthly Washington County Chamber of Commerce breakfast. His interpretation of the economy – nationally and locally – wasn’t as uplifting as some indicators show.
His message, to an audience of about 60 at Quicksilver Golf Club, is that economic statistics are like their sporting brethren – they can be deceiving. There are positive numbers that, following revision and closer examination, aren’t so promising, especially when compared with figures before the Great Recession struck in 2008.
Take unemployment. Rates have fallen to 6.3 percent in the U.S., 5.7 percent in Pennsylvania – a 5 1/2-year low – and to 5.3 and 4.8 percent, respectively, in Washington and Greene counties.
While acknowledging these percentages have dropped, Venkatu, vice president and senior regional officer in Pittsburgh, said they have been compiled at a time when the workforce is diminished. People at opposite ends of the age spectrum either have stopped working or are continuing with their educations, and are not part of the jobless equation.
“Unemployment is pretty much driven by declines in the workforce,” Venkatu said. “We’re seeing improvements in the labor market, but employment is still below pre-recession levels.”
Among other observations made during a PowerPoint presentation, he said “average inflation-adjusted wages are roughly back to where they were in 2007”; consumption growth is weak; and “purchase and refinance applications for mortgages are down considerably from a year ago.”
Narrowing his focus to the region, Venkatu said “things are much better here in Washington County” than they had been in recent years, and the same with the Pittsburgh Metropolitan Statistical Area. The seven-county MSA – made up of Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and Westmoreland – had an April jobless rate of 5.6 percent.
But he tempered that by stating, “The perception is the area has made good improvement, but revisions indicate (the improvement) is weaker (than perceived).”
Venkatu’s perception of a depressed audience likewise should have been up for revision. Some chortled at those remarks and spoke with him, one on one, afterward.
For them, it may have been more of a case of sobering objectivity.