Statement by Thomas M. Hoenig, President, Federal Reserve Bank of Kansas City, before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, March 10, 1993 - Statements to the Congress - Transcript

Federal Reserve Bulletin, May, 1993

* Kansas. The diverse Kansas economy has grown solidly throughout the recovery, adding jobs at an average rate of 1.6 percent a year. The state's service sector has been strong, with steady gains in business and personal services, particularly in the Kansas City metropolitan area. Construction has been boosted by a strong residential market and a pickup in public infrastructure projects. The state's important farm economy is prosperous due to high cattle prices and a large wheat harvest. The general aviation, automobile, and energy sectors remain weak, but they have only slightly dampened what has been a healthy state economy overall.

* New Mexico. The New Mexico economy has grown steadily in the recovery. Employment in the state has increased at an annual rate of 1.7 percent, with services and government activity providing the greatest strength. New Mexico's defense labs and installations have benefited somewhat from defense cuts elsewhere in the nation, and state and local government employment has increased. Tourism has also been a plus for the northern half of the state. Partly offsetting the strength in these sectors, manufacturing and mining have been somewhat weaker than in the two top states.

* Nebraska. Nebraska's economy has grown modestly during the recovery. The state's job rolls have grown at an annual rate of 0.9 percent. Despite sluggish job growth, the state's unemployment rate is less than 3 percent, one of the lowest in the nation. The state's nondurable manufacturing, dominated by food processing, has remained buoyant. Healthy wholesale trade and service sectors have also helped bolster Nebraska's economy. Most of the state's economic gains, however, have been in metropolitan areas and smaller cities that serve as trade centers for their surrounding areas. Rural parts of the state continue to languish.

* Wyoming. Wyoming's economy has posted modest growth during the recovery, adding jobs at an annual rate of 0.8 percent. The state's energy-based mining industry remains weak, although production of soda ash--used in glassmaking--has benefited from stronger construction activity across the nation. Service growth has been solid, mainly due to tourism-related development. Tourist destinations have continued to grow faster than other parts of the state.

* Missouri. Throughout the recovery, Missouri's economy has grown more slowly than most other District states due to its heavy reliance on manufacturing. Kansas City, which depends less on manufacturing, has fared better than the eastern part of the state. Overall, Missouri's job rolls have grown at an annual rate of 0.4 percent throughout the recovery. Employment in manufacturing has fallen at an annual rate of 1.5 percent during the recovery. Durables industries, the backbone of the state's industrial base, have been especially weak. The manufacturing slump has been partly offset by healthy gains in service employment. A strong farm economy, meanwhile, has buoyed local economies in rural parts of the state, and southwestern Missouri has been strong because of tourism.