worst is over in terms of job loss, approximately 8 million jobs have been lost in the past three years, and it will take sustained, robust job growth for some time to return all those workers to jobs. other indicators also suggest a challenging employment picture ahead. specifically, data collected by the bureau of labor statistics indicates the unemployed, on average, are remaining unemployed longer than in the past. and more people are underemployed as employers reduce costs by shifting to part - time staffing models. 3 so far, most of the stabilization in the unemployment rate has come from a sharp reduction in layoffs and terminations. we have not yet seen any substantial improvement in hiring rates. aggressive moves by businesses to reduce costs by cutting jobs and work hours have resulted in solid gains in aggregate productivity. this bodes well for increased employment in the coming year, but i anticipate that employers will add jobs cautiously in order to preserve these cost savings and efficiency gains for as long as possible. improvement in labor market conditions is clearly a key component of a sustained economic recovery. it is important to note that unemployment is not distributed evenly across all segments of the population. men, young workers, and low - skilled job seekers are disproportionately affected by current job losses. 4 most notably for purposes of this discussion, the prolonged unemployment of so many low - skill workers, in particular, is increasing the demand for training and education. retraining workers to acquire the skills demanded in today ’ s job market is an ongoing challenge as employment shifts away from low - skill manufacturing toward the service sector, bureau of labor statistics, u. s. department of labor. bureau of labor statistics, u. s. department of labor. technology, and health care. the recent economic crisis and the rise in unemployment have only made the need to retrain workers more urgent. effective workforce development is necessary to ensure that workers have the skills they need to find new employment and that communities have a consistent supply of well - qualified workers to remain competitive. traditional workforce development strategies include pre - employment training and job placement to help low - and moderate - income people transition from one job to another. most commonly, this involves occupational training through certificate and degree programs, but it also includes the training and development workers receive from employers. workforce development initiatives primarily focus on making job seekers “ job ready ”. given the current unemployment rate, governments and community organizations have understandably focused on projects and programs that will create new jobs

in the professionalism and quality of our community bank examiners. one particularly valuable aspect of our federal structure is that, over the years, it has provided policymakers in washington with a way to keep in close touch with the continentspanning, highly varied economy of the united states. when i attend board of directors meetings at regional reserve banks, which i do regularly, one of the most interesting portions is the go - round, during which each director provides his or her perspective on local economic developments. quite often, the directors who are community bankers provide some of the most valuable contributions. that fact should not be surprising. by their nature, community banks interact with many parts of the area economy – consumers, small businesses, large businesses, real estate developers, even local governments. this breadth of vision, together with a good sense of the underlying economic forces at work in each locality, gives community bankers a unique perspective on the developments in their part of the country. when the fed analyzes economic developments, of necessity we rely on official economic data to identify broad national trends. however, the official data often mask the diversity of the u. s. economy ; moreover, the data are inherently backward - looking, telling us what happened in the past quarter or year. in contrast, the grass - roots information that we obtain from community bankers and the other community and business leaders who serve as reserve bank directors provides a forward - looking perspective on economic developments and concerns, as well as a level of detail and qualitative insight that is often lost in the aggregate numbers. our contacts with community bankers also provide critical insights into the state of our nation ’ s banks. because of the remarkable diversity of the u. s. financial system, a supervisory agency that focused only on the largest banking institutions, without knowledge of community banks, would get a limited and potentially distorted picture of what was happening in our banking system as a whole. close connections with community bankers enable the federal reserve to better understand the full range of financial concerns and risks facing the country, such as the current difficult problems in commercial real estate lending and the impediments to small business lending. for example, recent patterns in commercial loan growth are very different at large and small banks, and our links to community bankers help us to better understand these trends. the community banking perspective is also critical as we try to assess the burden and effectiveness of financial regulation. as a group, community banks are also important to the nation ’ s financial stability, a particular