find no evidence to suggest that a wage - price inflation spiral is getting underway. however, we will continue to monitor expectations for medium - term inflation very closely. to sum up, economic conditions have improved in the past year. yet, the recovery remains moderate and we still have a considerable way to go to meet the fed ’ s dual mandate of full employment and price stability. regional economic conditions so, how is our region doing? as some of you may know, the new york fed produces indexes of coincident economic indicators to help monitor the performance of the region. based on these measures, the downturn in economic activity in new york ended in november of 2009, and since then activity in new york state and new york city has been recovering steadily at a moderate pace. regional employment trends let me turn specifically to employment trends in the region. in particular, i want to describe our region ’ s experience during the recession and recovery. nationally, the great recession, which began in december 2007, has been the deepest economic downturn since world war ii. when employment finally bottomed out in february 2010 – about seven months after the official end of the recession – the country had lost almost 6. 5 percent of its jobs and the unemployment rate had more than doubled. many people lost their jobs or saw their hours or income cut, and the duration of unemployment for jobless workers reached a historical high. for many families, this distress was compounded by losses of wealth from declining home prices. since that low point of employment, job creation has resumed, albeit at a slower pace than we would like, and unemployment has retreated by a percentage point. as in other parts of the country, employment in our region declined substantially during the recession. but, the various parts of our region had very different experiences. employment in much of new york state, including the hudson valley, declined less severely than the nation. both the state and city lost about 3. 8 percent of their jobs. part of the reason for the more moderate decline in jobs in new york during the recession was a less pronounced boom - bust housing cycle. indeed, as a percentage, the city and state lost fewer jobs during this recession than they did during either of the last two downturns. now, as in the nation, a labor market recovery has begun across much of the region. over the past year, new york state has added roughly 100, 000 private - sector jobs. within the state, the recovery has been somewhat uneven.

investors are now coming to the euro area – it ’ s a sign of trust in the reform process here. that ’ s good news. what remains very challenging is growth, which is too low, and it should be europe ’ s priority to support it not only in countries with adjustment programmes but also in all other euro area countries. this cannot be achieved through additional public spending but through additional investment. all countries have to restore a climate of confidence that will be conducive to investment, and this includes large economies such as germany, france and italy. according to the latest figures, the inflation rate in the euro area has dropped as low as 0. 7 %, the lowest level in years. how serious is the problem of deflation for the ecb? the governing council ’ s assumption is that the rate of inflation will gradually increase towards our target of close to, but below, 2 %. we are however closer to the area where inflation expectations could be altered and create downside risks to price stability. so we are very vigilant regarding risks to our baseline scenario, which envisages inflation slowly going back to 2 % over the medium term. this is our primary mandate and we take it very seriously. at its last meeting, the governing council firmly reiterated our forward guidance, whereby we expect the key ecb interest rates to remain at present or lower levels for an extended period of time. we remain firmly determined to maintain the high degree of monetary accommodation that is appropriate for the euro area economy, and will not hesitate to take further decisive action if required. could you explain why an inflation rate of 2 % is better than, for instance, 0. 2 %? inflation being below 2 % and close to 2 % is the definition of price stability that the ecb has chosen. in the uncertain environment with the euro area in transition and the participating economies undergoing a lot of structural change, it is very important that the ecb sticks to its inflation objective and maintains its credibility as an anchor for the reform efforts in europe. the reason why the 2 % number has been chosen is that this is a level that is neither too high nor too low. we know that inflation which is too high can be detrimental for the economy as it can lead to destabilising feedback loops, for instance, through wage settlements and price indexation, and ultimately erode trust in the currency. but very low inflation can also be destabilising. that ’ s why inflation which is too