Federal Reserve Bank of Philadelphia president visits Johnstown to hear about economic conditions

JOHNSTOWN, Pa. – Anna Paulson, president and CEO of the Federal Reserve Bank of Philadelphia, visited Johnstown Wednesday to learn how policy made in Washington affects families, businesses and communities.

She is among the members of the Federal Open Market Committee, which meets eight times per year to review economic and financial conditions of the nation, determine monetary policy and assess the risks to its goals of price stability and sustainable economic growth.

“My main policy job with the other 18 members of the FOMC is to set short term interest rates,” she said.

“Our goals are to have stable prices and maximum employment, and so we are doing that for the whole country, but that impacts how much you pay on your car loan, your credit card bill and how much it costs to buy a home or start a business.”

The FOMC meets again the last week of October.

“For me being able to hear the conditions here, in people’s real lives and in real communities, it informs me, and it is also something I want to keep front-of-mind as I am making those decisions,” she said.

The FOMC lowered interest rates at its last meeting, and she said she thinks another decrease is possible.

She met with community stakeholders in Johnstown Wednesday, including Goodwill of the Southern Alleghenies President and CEO Brad Burger.

A roundtable discussion was hosted by Goodwill at 540 Central Ave. to to discuss workforce challenges and solutions.

The discussion included Goodwill, PA CareerLink Blair County and Southern Alleghenies Region, Johnstown Area Regional Industries, Vision Together, the Community Foundation for the Alleghenies, Pennsylvania Highlands Community College, JWF Industries, the Southern Alleghenies Planning and Development Commission, the University of Pittsburgh at Johnstown and AmeriServ Financial Inc.

“The overall picture is labor demand is outstripping labor supply for our area in many sectors,” Burger said. “We are trying different ways to work with youth to onboard them into career tracks earlier, and for folks who are disenfranchised or outside the workforce, we are trying to re-engage them. They have challenges with transportation or substance or mental health issues and skill barriers. With older workers it can often be health-related issues or child care.”

Burger said Paulson listened intently during the roundtable discussion.

“I think when you have someone who can influence policy and they are out here and interested in talking with folks on the ground, it always gives you optimism and hope that it will translate to policy that will help the folks you are working with,” he said.

The Federal Reserve System includes 12 independent regional Reserve Banks located across the United States and the Federal Reserve Board of Governors in Washington, D.C.

The Philadelphia Fed, led by Paulson, is the home of the Federal Reserve’s third district.

Her stop in Johnstown is part of a series of visits across the district, which encompasses Delaware, southern New Jersey, and eastern and central Pennsylvania.

“One of the things that’s been a theme is demographics – slow population growth and how that connects with jobs,” she said. “That’s really a national theme, that the third district is maybe a little older, population growth is a little bit slower so I think communities here are at the leading edge of thinking about ‘what do we do about that?’ ”

Paulson uses data and to inform her views on policy, but the stories she heard Wednesday from the roundtable in Johnstown is what brings data analysis to life, she said.

Sometimes meeting people shows a different story than data analysis, she said.

“Especially now, I think we are seeing high-end consumers are doing pretty well and other people struggling with high prices,” she said. “At the same time you can hear that one set of households is benefiting from the stock market, but you are also hearing – and you hear this here in Johnstown – that demand for the food pantry is going up. So, these two things are happening at the same time and you think ‘what does that mean for growth as we go forward?’ I’ve been thinking about those things a lot.”

Paulson said she heard about Johnstown’s economic challenges Wednesday.

“People are leaving the area,” she said. “The population is older, but there are two types of folks looking for jobs: one of them is in the 55-year and older range, and for them technology is a challenge. And then there are younger people still in school. What I took away from that roundtable was the level of collaboration in Johnstown with the community college, the university, employers, nonprofits, the workforce development board all playing a role (to engage the workforce).”

She said the roundtable discussion included ways in which employers meet with high school students and ways that organizations work with disenfranchised people to connect them with immediate needs including food and mental health counseling while working to prepare them to enter the workforce through adult education.

“It’s really hands on here,” she said. “People are asking, ‘Where’s the barrier to employment? Let’s jump over it.’ ”

She referenced the area’s defense industry and light manufacturing sector.

“It sounds like if you have skill sets and you are ready to work, then you have tons of opportunities here,” she said.

“There’s a scarcity of labor, so if you are looking for a job, there is opportunity, and the cost of living is relatively low so it could be a place that could pull people in.”

AmeriServ Financial Inc. President and CEO Jeffrey Stopko is chairman of the third district’s Community Depository Institutions Advisory Council.

The council provides information, advice and recommendations to the Federal Reserve Bank of Philadelphia from the perspective of community depository institutions.

“I think it’s a real positive that a person of her stature came to Johnstown, met with community leaders, wants to get a better understanding of our economy, the labor markets, how the banks are doing,” Stopko said.

“We’ve seen commercial loans slow down in the third quarter, but I look forward to the fourth quarter as positive,” he said.

“The Fed took action in mid-September to lower interest rates for the first time in really about a year. And I think the expectation is you are going to continue to see them modestly decrease rates further through the end of the year.”

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