Richmond Federal Reserve Pres. talks economy, recovery

The national economic downturn can be characterized like a hard basketball foul, said Jeffrey M. Lacker, president of the Federal Reserve Bank of Richmond, Tuesday.

"The recession is over, as economists define it, is when you hit the floor," he said. "But you don't feel like its over until you get back up on your feet, and even then you might have some lingering bruises."

Lacker spoke to city and state business leaders as part of a regional forum of the Richmond branch of the reserve.

"I'm supposing most of you have heard that the recession is over, and I also suspect that few of you feel like the recession is over," he said.

In his speech, Lacker addressed recent indicators of recovery, from job numbers rising and stabilizing industries, such as housing numbers and vehicle sales.

Though West Virginia hasn't been affected as much as other states, its number of unemployed citizens has grown.

West Virginia grew from a 3.8 percent unemployment rate in October 2008 to double that in just a few months, he said.

Several factors worked in the state's favor, however, including the strength in energy markets such as coal.

Lacker said West Virginia did not have the same high house prices that other states did. High house prices were a contributing factor to the subprime mortgage problems that contributed to the economic downturn.

"Because you didn't get a big run up, you didn't collapse," he said.

During the speech, Morgantown Mayor Bill Byrne drew attention to the city's relatively low unemployment rate of nearly 6 percent.

"The key to Morgantown's success is not a secret," Lacker said. "If you compare the composition of economic activity in Morgantown to the rest of the state, the rest of the country, you'll find that a larger share is in the government sector."

Among the state's government employers are West Virginia University, the FBI Information Services Division and NASA.

"The fact that those are such a large fraction of activity here has really helped Morgantown weather the storm," he said.

Lacker also noted during his speech a recent study by the W
WVU Bureau of Business and Economic Research that forecast job growth in the second half of the year.

He said he "fully endorsed" the report, saying it was in line with national economic outlooks.