and korea. the state ’ s economy is also quite diverse, and its industry mix mirrors that of the national economy. a sizeable number of jobs in the state are in the healthcare, professional and business service, wholesale and retail trade, and leisure and hospitality categories. when we look at the northern part of the state, we see a somewhat greater concentration of jobs in finance, particularly in hudson county, in goods distribution, related to the ports, rail lines and trucking and warehousing activities that are prominent here, in pharmaceuticals manufacturing and research and development, and in the private education sector. the area also has important links to new york city. for example, the data centers here in the state serve many of the city ’ s financial firms. in addition, a large number of residents, including myself, commute each day into the city. a smaller but still sizeable number of new yorkers commute into this state. now, how did the state fare during the downturn and how is the recovery proceeding? as i mentioned, the new york fed produces indexes of economic activity to help monitor the bis central bankers ’ speeches performance of the region. 1 based on our index, the downturn in activity in new jersey began about the same time as the great recession was beginning nationwide – that is, around december 2007. while activity in the state is no longer declining, and there has been a slight pickup this year in the level of activity, to date there is still no sign that a strong recovery has taken hold. quite frankly, this modest recovery in new jersey contrasts with the relatively sturdy recovery in activity in new york city over the past 18 months. employment in our region also declined substantially during the great recession. job losses in new jersey totaled about 250, 000 – on par with the roughly 6 percent loss nationwide. the pattern of job losses here in northern new jersey was very similar. in new york city, job losses were also large but somewhat less severe, with employment in the city down a little over 4 percent. the jobs recovery in new jersey to date has been sluggish. the private sector has seen moderate gains, with growth in some of the key sectors i mentioned earlier, particularly professional and business services, education and health, and leisure and hospitality. businesses in these sectors, on balance, expanded jobs at a faster rate than in the nation. but the state continues to shed jobs in manufacturing and residential construction. notably, overall employment in the state has been weighed

” remarks at the quarterly regional economic press briefing, new york city. august 12. bis central bankers ’ speeches current with their payments – using the special consumer credit panel we developed. the report for the second quarter of this year was just released on monday. 3 families in new jersey are reducing their debt levels. as of the second quarter of this year, for those people with a credit report, average debt per person was about $ 60, 400 down from $ 63, 000 three years ago. but the crisis has taken its toll. delinquency rates on the debt are high : 7. 4 percent of all debt in the state is seriously delinquent, roughly the same rate as the nation. the comparable figure for the state just three years ago was 4. 1 percent, so, like the nation, households in the state still appear to have a considerable way to go before they reach more comfortable debt levels. while there have been indications that home prices in the area have been firming in the past few months, the mortgage crisis continues to take a toll on new jersey homeowners. as of march of this year, 10 percent of all borrowers in the state were either 90 - plus days delinquent on their mortgages or their homes were in foreclosure – above the national rate of 7. 7 percent. in essex county, that rate had reached 16 percent, and in newark it was 30 percent. in our recent small business survey, which we conducted in may, we asked firms to report on their first quarter sales and their future outlook. the results were encouraging. over twothirds of firms told us they had stable or increased sales in q1, up from 50 percent last year. when asked about their future outlook, while the majority of business owners, 56 percent, were neutral – many more said they were optimistic than pessimistic – 37 percent compared with only 7 percent. conclusion these debt and delinquency figures, together with the weak jobs picture, suggest that new jersey faces a number of challenges. in the near term, the key issue will be to expand jobs and reduce unemployment. at this point it is difficult to say when the pace of recovery in the state will pick up, but several factors appear encouraging. a continued expansion of output and employment nationally would clearly help to expand activity and employment in a number of industries in the state, including professional and business services and the goods distribution industries. also, the pace of contraction in