Boston fed reserve chief predicts U.S. slowdown won't be severe, touts Maine's diverse economy
Courtesy / Federal Reserve Bank of Boston
From left, Deb Young, COO of the Bath Area YMCA; Marc Meyers, Bath City Manager; and Susan M. Collins, president and CEO of the Federal Reserve Bank of Boston, at a meeting in Maine last week.
As U.S. central bankers increase borrowing costs to try to tame inflation, the new head of the Federal Reserve Bank of Boston is confident in the economy's ability to weather a downturn.
"As we tighten, there will be some slowdown and overall some increase in unemployment," Susan M. Collins told Mainebiz in a Friday phone interview after her first visit to Maine since taking office in July.
Asked whether she had any concerns about Maine's labor market, Collins expressed confidence in the U.S. economy in broader terms.
"Overall, I think there are many reasons to believe that that slowdown and that downturn will not be a severe one, and that in many cases it will be firms having fewer vacancies as opposed to laying people off."
The U.S. unemployment rate dropped to 3.5% in September from 3.7% in August, matching July's 29-month low.
The Maine Department of Labor is due to release September unemployment data this Friday. In August, the state's unemployment rate rose to 3.1% in from 2.8% in July, registering its first month-to-month increase since June 2021.
Noting that there are still nearly two vacancies for every unemployed worker in the United States, Collins said she sees a lot of room for realigning labor market demand with supply.
"Of course there will be some" layoffs, she said, "and those are challenging, and I think it's important to recognize the impact that that has, and that that's concentrated for particular individuals and perhaps particular communities."
Collins, who is of Jamaican descent and was born in Scotland and raised in New York City, spoke to Mainebiz after her first visit to the Pine Tree State since taking office. Before leading the Boston Fed, she was provost and executive vice president for academic affairs at the University of Michigan. Collins is only the second female and first person of color to lead the Federal Reserve Bank of Boston in its 108-year history.
'Vibrancy and diversity'
Besides meeting with Gov. Janet Mills and Commissioner Heather Johnson of Maine's Department of Economic and Community Development last week, Collins held a roundtable with business leaders.
She also held a meeting related to the Boston Fed's Working Communities Challenge initiative to build healthy economies in rural northern New England towns.
"Spending time in Maine was really valuable," she said. Collins said she was struck by the diversity of business sectors in Maine, from retail and lobster to health and agriculture, and small business as well as large.
"That vibrancy and that diversity was extremely valuable as an introduction to Maine, and I look forward to coming back," she said.
Collins said some of the key challenges she heard about, including an aging population and housing, cut across sectors and are also national challenges. On the plus side, she praised the plan to bring broadband throughout the state as "something to be excited about."
Collins said she expects to make regular visits to all of the states in the Boston Fed's First District, which also includes Connecticut (except Fairfield County), Massachusetts, New Hampshire, Rhode Island and Vermont.
On a more personal note, Collins said she was glad to finally meet Jeanne Hulit, president and CEO of Maine Community Bancorp, who serves on the Boston Fed's board of directors, in person.
"Her voice is really valuable, and she brings a lot of thoughtful perspective and is just a great member of our board community in a variety of different ways," Collins said.
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