The gradual, if not spectacular, recovery in recent years has pushed economic stories and reports out of the limelight.
“Across the U.S. and especially out West, there has been a full recovery from the housing crash and recession,” said John Williams, the Federal Reserve’s top official in the West.
“I don’t see any signs of recession,” he added during a stop in Phoenix. “They’re not even flashing yellow right now.”
Williams, president and CEO of the Federal Reserve Bank of San Francisco, said telltale warning signs such as an inverted yield curve — where short-term interest rates are abnormally higher than long-term rates — aren’t apparent now and thus aren’t pointing to a slowdown anytime soon. Rather, rates of job creation remain solid, inflation remains low, and other indicators point to further steady if unspectacular growth.
“We’re in a strong economy and not seeing obvious signs that it’s causing unemployment.”
Also, the “misery index,” which adds together the unemployment rate and inflation rate, shows low, favorable readings around 6 percent currently, he added.
Economic growth has continued even though various cities and states around the West, including Arizona, this year have raised their minimum wages — a factor that normally could slow job gains and economic growth.
“We’re in a strong economy and not seeing obvious signs that it’s causing unemployment,” said Williams, a 55-year-old native of Sacramento who earned a doctorate in economics from Stanford University and served in various prior positions with the Federal Reserve.
The nation’s central bank is trying to keep the economy going without overheating by raising interest rates gradually and by slowly unwinding the trillions of dollars worth of bonds it purchased shortly after the recession.
“That’s the most telegraphed thing in the history of central banks,” Williams said, referring to the planned reduction of the Fed’s balance sheet. “We’re trying to make it boring.”
Still, the economy faces challenges, which Williams acknowledged by noting that growth remains sub-par at 1.5 to 2 percent annually. Among the factors contributing to that, waves of Baby Boomers now are retiring while a low birthrate has crimped household formations and the number of people entering the labor force, he said.
The Federal Reserve operates a cash-processing facility in Phoenix, which Williams cited to discuss the ongoing importance of currency. While other forms of payment have clearly grown in popularity — credit and debit cards, electronic transfers and even Bitcoin — a lot of people still use cash.
“Cash is holding steady,” Williams said, especially for smaller payments and among people who lack bank accounts, credit or debit cards or smartphones.
In fact, the amount of U.S. currency in circulation worldwide has doubled over the past decade, from around $750 billion to $1.5 trillion, Williams said.
The Phoenix facility removes dirty and tattered currency from circulation, checks for counterfeit bills and performs other tasks.