Economically speaking, we in the Southeast probably became a bit spoiled. During all of the nation's recent recessions but the last—2001, 1990–91, 1981–82—our region generally outperformed the rest of the country. However, that did not happen during the Great Recession. What's more, the Southeast continued to lag the rest of the country as the recovery gained momentum in 2010.
This year's annual report examines the halting progress in the region's long recovery from the recession that lasted from December 2007 to June 2009. It explores why the Southeast has fared comparatively worse than the nation as a whole and what the Atlanta Fed did to better grasp the complex realities of today's economy. In addressing these issues, the Atlanta Fed's 2010 Annual Report considers several crucial and timely economic topics, including:
In one section, the annual report profiles the Bank's corporate citizenship program, which is central to our mission as a public institution. We also report on our work in identifying and mitigating new sources of fraud and risk in the nation's payments system, which are the byproducts of advancing technology in the payments industry. Finally, we pay tribute to Atlanta Fed retiring First Vice President and Chief Operating Officer Pat Barron. Pat devoted 44 years to the Federal Reserve System. As an advocate for modernizing America's payments systems, he led the critical but delicate task of overhauling the Federal Reserve's nationwide check processing operations in response to the migration toward electronic payment methods.
Beyond the report's content, I'd like to also note the reasons why we as a Federal Reserve Bank publish an annual report. As a public policy organization, we strive every day to earn the public's trust. We are rightly held accountable for our actions in pursuit of the Federal Reserve's three areas of economic stability, financial stability, and payments system effectiveness. Accordingly, each year, this document serves as a record of our performance and contributions to our communities, region, and nation. We hope it demonstrates the value that the Federal Reserve Bank of Atlanta delivers to residents throughout the Southeast.
Much of that value, of course, comes through understanding our region's economy from the grassroots. By understanding what is happening "on the ground," so to speak, we can make our most effective contribution to the nation's monetary policy.
I turn again briefly to the Southeast's economy. Rapid population growth, especially in Florida and Georgia, helped propel the region through earlier national downturns. But in the current cycle, in-migration slowed or even reversed. In fact, to a significant degree, some of the very forces that helped create widespread prosperity in recent decades bedeviled the Southeast during the Great Recession. The story was that too much of a good thing really was too much.
Excess residential construction fed severe housing market woes. Falling home values undercut household wealth, which in turn hampered consumer confidence and spending. Large accumulations of unsold homes and planned but incomplete subdivisions not only eroded the finances of construction and development firms across the region, but also led to one of the most difficult periods the Southeast's banking industry has endured in decades. Meanwhile, throughout 2010, unemployment in the region remained higher than in the rest of the nation.
Despite certain regional differences, the Southeast's fortunes are in the main bound up with those of the nation at large. Specifically, the United States faces serious fiscal and economic imbalances that must be resolved in order to lay a foundation for long-term prosperity. It is critical that financial regulatory reforms are enacted in a manner that genuinely helps to minimize the likelihood of future crises. A vital component of any sound regulatory regime is, of course, a truly independent central bank.
We face uncertainties, to be sure. Yet as the calendar turned to 2011, we at the Atlanta Fed detected stirrings of renewed business and consumer confidence. Improving attitudes, we know, can help steer the economy in a positive direction.
On behalf of all my associates at the Atlanta Fed, thank you for your continued confidence and trust. Please read on, and let us know what you think.
Dennis P. Lockhart