combination of the restocking of inventories, domestic demand growth ( particularly in investment goods ), and higher exports. the concentration of these industries in parts of our region meant that those areas were poised to take advantage of this growth. the region has seen some increase in factory jobs in recent months, which undoubtedly reflects the expansion of production that has occurred nationally in these industries. a number of indicators suggest that the inventory cycle may be largely complete – that is, the recent restocking has brought inventories into a better balance with sales. if so, we will lose restocking as an impetus for growth. despite this, we expect manufacturing output to continue to expand because of improving domestic demand and foreign demand for u. s. manufactured exports. yet, if this recovery follows the typical pattern for past recoveries, the prospect for growth in factory jobs will likely be weaker here than the rest of the nation. longer term, the sector ’ s prospects are likely to be governed by a continuation of the trends i mentioned before in international trade, technology and consumption patterns. this means that output and wages will likely continue to rise, both nationally and regionally. however, the sector is unlikely to be a major source of job growth. beyond the national trends that work against an expansion of factory jobs, the new york - new jersey region faces ongoing competitive pressures as a location for manufacturing production. that competition comes from other regions of the country, as well as from abroad. one key to meeting these competitive challenges will be for the region to ensure that it develops and attracts a highly skilled workforce that can meet the needs of innovative and rapidly changing firms. iv. the empire state manufacturing survey in order to monitor conditions in the region, the new york fed conducts a monthly survey of manufacturing firms in new york state, our empire state manufacturing survey. let me tell you a little about the survey and then review recent patterns. the survey is sent to a pool of about 200 manufacturing executives in a wide variety of industries across the state. about 100 responses are usually received. for the survey ’ s main index – which is called the general business conditions index – respondents report the change from the previous month in of overall conditions in their firm. to explain their answers, we also ask them to assess components of activity such as orders, shipments, inventories and employment. respondents are also asked for their views on the likely direction of these indicators over the next six months. in addition, each month we ask supplementary questions on a

bankers ’ speeches fed policy. promoting growth and stability in the u. s., i believe, is the most important contribution we can make to growth and stability worldwide. there is, of course, the argument that fed policy has been too accommodative for too long, creating risks for financial stability worldwide. here, i think, it ’ s important to consider carefully the counterfactual. would countries beyond our borders really have been better off with a weaker u. s. economy? the fundamental issue is whether u. s. monetary policy has helped support our dual objectives of stable prices and maximum sustainable growth and whether this is consistent with a healthy global economy. moreover, it is far from clear that explicitly coordinated policy would produce better outcomes for the global economy generally, or the emes specifically. central banks have challenges enough in tailoring policies to their domestic circumstances. i believe that it would be taking on too much to attempt to collectively fashion policy in reference to global conditions. moreover, our last system of explicit coordination – the system of fixed exchange rates under bretton woods – broke down for a reason. monetary policy meant to suit everybody is likely in the end to suit nobody. similar considerations underlie the widespread move in the emerging world away from fixed exchange rate regimes. policymakers worldwide have learned that a framework capable of responding in a disciplined but flexible manner to changing domestic conditions works best over the long run. while explicit coordination looks neither feasible nor desirable, there is more that central banks in general, and the fed in particular, could do to be better global stewards. one thing recent events demonstrate is the importance of effective fed communication. it is clear in retrospect that our attempts last spring to provide guidance about the potential timing and pace of tapering confused market participants. in particular, markets seemed to conflate tapering with monetary policy tightening and raised their expected paths for policy rates. lately, we seem to have done better : markets now seem to understand that policy rates will likely remain exceptionally low for a considerable period of time even after tapering is completed. as you know, we ’ ve taken a number of steps in recent years to increase transparency and improve our communications. this includes regular press conferences following federal open market committee ( fomc ) meetings by the fed chair ; the publishing of growth and inflation forecasts of fomc participants ; and a concerted attempt to lay out the guideposts that the fomc will look at to assess progress