Federal Reserve executive addresses reality of recession in Steamboat talk
August 11, 2010
Steamboat Springs — During his inaugural trip to Steamboat Springs on Tuesday, economist Mark Snead heard firsthand from local business leaders about their financial footings and economic outlooks. Unfortunately, their testimonies matched most of his statistics.
"The structural problems of the real estate industry here are as significant as we thought they would be," Snead said. "We knew the halt of the real estate market was having serious repercussions, but our visit here today confirmed this."
Snead, who is the assistant vice president of the Federal Reserve Bank of Kansas City's Denver branch, was in town to assess where Steamboat's major industries stood financially during the current recession. He said the city is making less economic progress than Colorado and that the lagging real estate and tourism industries will take some time to recover.
"The consensus here is that there is certainly not a strong rebound under way," Snead said. "There are some fundamental economic issues left to deal with, but I believe the worst is behind us."
The Federal Reserve uses the data Snead and other bank executives collect from their interviews to develop monetary policies that are responsible for regulating interest rates and money supplies. He said visits by the Federal Reserve Bank occur regardless of whether the economy is experiencing a recession and that his visits to cities about the size of Steamboat are especially important.
"As the region you are trying to analyze gets smaller, the federal data that is available gets increasingly sparse, and it almost requires that you get on-the-ground intelligence from the community," he said.
Snead said the data-gathering process is an integral part of the nation's economic system.
"We're largely unseen, but the information we gather is used by the Federal Reserve to make decisions at the highest level," he said.
Despite continued high unemployment and other economic challenges, Snead said there are several reasons to be hopeful in Steamboat.
"There is some indication that the tourism numbers are beginning to show some improvement," he said. "People here are optimistic that the next winter cycle will be better than the last one for the first time in the downturn."
After hearing about the loss of business and declining revenues, Snead said it was the attitude of the local business leaders he talked to that made the biggest impression on him.
"Despite the data, and despite the harsh realities, the individuals I talked to had a can-do spirit," he said. "I'm most impressed by the underlying optimism that had them saying, 'This, too, will pass.'"