Issue #14 | April 17, 2018
Recently, from the Cleveland Fed
How is monetary policymaking like a handstand?
They both take a lot of balance. Monetary policymakers don’t want the economy to overheat, but neither do they want to overreact to the positive outlook and potentially curtail the expansion. Last month’s rate increase reflected the healthy outlook for the economy and the achieved and expected progress on the Fed’s monetary policy goals of maximum employment and price stability. Read President Mester’s speech.
Turning transit from an obstacle into an onramp
As the labor market tightens, some employers experience difficulty locating new workers. Part of the issue may be lack of reliable transit, which can hold back lower-wage workers from finding—and keeping—jobs. Cleveland Fed officers visited Dayton, Ohio, to learn what local organizations are doing to address struggles such as these. Check out the Cleveland Fed Community Development Department’s blog.
Rollin’, rollin’, rollin’: Cincy and Cleveland
During the second half of 2017, growth in the Cincinnati metro area outperformed that in the state for most major indicators. During the same period, the Cleveland metro area’s economy continued its slow climb in the second half of 2017, and in December, the unemployment rate fell on a year-over-year basis for the first time in more than a year and a half. Read the latest Metro Mix on Cincinnati and Cleveland.
What are some of the similarities and differences between metro, urban, and rural economies? Why does it matter for the community development issues you work on?
First, let me explain that a “metro,” or metropolitan area, represents the links between where people live and where people work, and it crosses urban, suburban, and rural boundaries. For example, there are people who commute between Portage and Summit Counties (Akron) or Medina and Cuyahoga Counties (Cleveland); all of these interconnections make up a metropolitan area. When we talk urban or rural, we’re talking more about how densely populated a place is.
One important similarity between urban and rural places is that both have high rates of poverty, though suburbs and small metros are actually increasing the most in terms of the numbers of poor. When we talk about a lack of resources and lack of access to jobs, mentorship, and social networks, we could easily be talking about a low-income neighborhood in Cincinnati and a poor neighborhood in rural Kentucky. When we talk about transit, we think, “Oh, of course it’s hard for the rural poor to access jobs if they don’t have a car.” It’s also hard for the urban poor to access jobs if they don’t have a car, especially if there’s unreliable and sparse public transit.
There are also really important ways that rural and urban areas are different. One is that many rural areas are facing population decline, which leads to a lack of next-generation leadership. For places that are losing population, it is important to think about how to build capacity and civic infrastructure.
There is a lot of interdependency between urban, suburban, and rural economies. In focusing only on differences, we miss the opportunity to see that we have a lot of shared struggles that we could be addressing jointly. In order to sustain economic growth that benefits all people, we need collaboration across city and county boundaries so that we can think bigger and longer term about our economy and its potential. There are efficiencies to be gained by collaborating. It’s about making sure that people can reach their potential and get connected to jobs that provide opportunities for advancement, and I think if we fail to see the bigger picture, that is much more difficult to do.
Emily Garr Pacetti
is the Cleveland Fed’s new vice president and community affairs officer. She leads the Bank’s community development work, including its research on and analysis of issues affecting low- and moderate-income people.
Graphic of the Month
It only looks like paint drying…
In a recent Economic Commentary, a Cleveland Fed researcher studies whether new capital buffers might be helpful in reducing the constriction of bank lending during recessions and explores the option of a rule-based countercyclical capital buffer.
On the Calendar
In Search of the Employment “High Road”: A Research Perspective on Developing Good Jobs (free webinar, in connection with the Federal Reserve’s Investing in America’s Workforce initiative)
Economic Overview by Cleveland Fed senior vice president Mark E. Schweitzer (Elyria, OH)
Deadline to apply to serve on our new Community Advisory Council
Reinventing Our Communities (Baltimore, MD)
Save the date: No link available—yet!
From around the Federal Reserve System
Racial wealth gaps influenced by amount of loans students of color take out for education
Gains in educational attainment are not enough to reduce the racial wage gap that increases with having student loan debt. One Federal Reserve Bank of St. Louis researcher found that 58 percent of black students reported that their parents’ contributions over their college careers averaged $4,200, while 72 percent of white families’ contributions averaged $12,000.
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