Federal Reserve Bank of New York

Recommendation on the FFR November 2006

National RGDP Growth Rate

National Growth is Declining in this Quarter. RGDP increased at an annual rate of 1.6% in the 3rd Quarter of 2006. It had increased by 2.6% in the 2nd Quarter.

Growth Rates in RGDP By state 1997-2006

Real Gross State Product in New York and New Jersey grew at 3.2 and 2.8% annual rates, respectively, during the 2nd quarter of 2006

Unemployment-Region Specific

• In New York the unemployment rate has fallen to 4.0%, its lowest rate in the last few months (July, August and September) The rate there is lower then it is nationally.

• In New Jersey the unemployment rate hit 4.4%. It was this low a year ago in 2005. It is right in line with the national unemployment rate.

0

1

2

3

4

5

6

Oct-05

Aug-06

Sep-06

Oct.2006

United States

New York

New Jersey

Unemployment-Region Specific

Unemployment-National

4.254.3

4.354.4

4.454.5

4.554.6

4.654.7

4.75

Quar

terly

Avg

2

Quar

terly

Avg

3

Aug. 20

06

Sept.

2006

Oct.

2006

• Nationally the unemployment rate has fallen over the month of October 2006 to 4.4%.

• The rate of unemployment was the lowest that it has been in the recent months (July, August and September 2006).

• Declining productivity raises questions about inflationary pressures at the given unemployment rate.

CPI 12th month/month Change

0

1

2

3

4

5

6

O-95 M-97 J-98 D-99 A-01 S-02 J-04 M-05 O-06 F-08

US CPI-U

NE Region

National and Region Specific CPI

In the 3rd Quarter the CPI dropped dramatically for the region and the United States as a whole.

NE Region CPI NE Region CPI-Difference from US CPI-U

-1

-0.5

0

0.5

1

1.5

O-95 M-97 J-98 D-99 A-01 S-02 J-04 M-05 O-06 F-08

The NE region is still experiencing higher prices then the rest of the nation

• Nationally: Privately-owned housing starts in October were at a seasonally adjusted annual rate of 1,486,000 units.

• A 14.6 % decrease since September and is 27.4 % below the October 2005 rate of 2,046,000.

Housing Starts