and confidence. the improvement we ’ ve seen in consumer finances in recent years should also bolster growth. the value of household assets has increased by 38 percent since early 2009, while household liabilities have fallen slightly over the same time period. while the process of balance sheet repair may not yet be complete, substantial progress clearly has been made. recent advances in consumer sentiment and financial wherewithal have not invigorated the housing market, however. over the last 12 months, new home sales have fallen by 1. 6 percent and new housing starts have fallen by 7 percent. much of this sluggishness, i believe, is due to factors that are unlikely to change quickly. the fall in home prices during the recession has given households a greater appreciation of the risks of leveraged investments in housing. this is contributing to what appears to be a relatively persistent shift in preferences away from ownership of single - family detached homes. so while i expect some gains in housing activity in 2015, i don ’ t think we should look for housing to make major contributions to overall growth. in contrast, business investment in plant, equipment and intellectual property has been a solid contributor to this expansion. coming out of the recession, this measure of investment grew rapidly for a couple of years, then more moderately, but it picked up steam in the second quarter last year. business investment seemed to be carrying good momentum into the year - end, and in my view is likely to continue to contribute to growth in overall activity in 2015. net exports are likely to be more of a challenge this year. over the last year, the value of the dollar in foreign exchange markets has risen by 8 percent. that makes imports more attractive here and domestic producers less competitive globally, which can be expected to increase our trade deficit and slow the growth of overall economic production. finally, federal government spending on goods and services is likely to continue to restrain growth. over the last three years, we ’ ve seen such spending fall at a 2. 5 percent annual rate. that may sound surprising, but note that this is only spending for goods and services, and it excludes transfer payments, such as medicare or food stamps. these transfer payments do not add directly to gdp ; their only effect is through household incomes. most forecasters are projecting federal spending to contract further in 2015 and beyond. you are probably well aware of the importance of federal spending on goods and services for virginia ; for example, close to 13 percent of all federal contract spending

what can be done to improve struggling high schools? ” journal of economic perspectives, spring 2013, vol. 27, no. 2, pp. 133 – 152. for example, see caroline m. hoxby and sarah turner, “ informing students about their college options : a proposal for broadening the expanding college opportunities project, ” hamilton project discussion paper, june 2013 ; and scott e. carrell and bruce sacerdote, “ late interventions matter too : the case of college coaching new hampshire, ” national bureau of economic research working paper no. 19031, may 2013. james heckman, “ schools, skills, and synapses, ” economic inquiry, july 2008, vol. 46, no. 3, pp. 289 – 324. bis central bankers ’ speeches furniture and textile manufacturing to provide well - paying jobs, but advances in global transportation and shipping facilitated the movement of much of that activity overseas. and while there has been a resurgence in manufacturing in the state, the new advanced manufacturing techniques require far fewer workers. today, there are only about half as many people employed in manufacturing in north carolina as there were in 1990, even though the value of the goods produced has increased – a story that is true nationwide as well. more broadly, while technological innovation may increase the demand for some types of workers, it often reduces the demand for others – even, sometimes, for skilled workers, as occurred during the 1800s when new production techniques displaced glassblowers, shoemakers, bakers and other artisans. 13 more recently, computers have not been a boon for everyone. many lower - skilled workers have been replaced by machines, and an increasing number of middle - skill workers, such as tax preparers and paralegals, also are vulnerable to automation. but the technological displacement of workers has been part and parcel of rising living standards for centuries. in 1900, more than 40 percent of the u. s. workforce worked in agriculture ; today, that number is less than 2 percent. just as technology reduced the need for farm labor, it also allowed the creation of new jobs in new sectors, and i don ’ t think any of us would argue that we would be better off if nearly half our population was employed to supply our caloric needs, rather than being free to work as engineers or truck drivers or nurses. we must understand the needs of the workers who are displaced and recognize that adjusting to evolving circumstances takes time, but history provides good reason to be optimistic that the