Fed faces patchwork recovery despite near-normal labor markets
By Howard Schneider
ALEXANDER CITY, Ala (Reuters) - As gleaming new factories turn out Airbus (AIR.PA: Quote) aircraft and Hyundai (005380.KS: Quote) cars in Alabama's urban centers, this small town that once was home to Russell Athletics shows the dilemma now faced by U.S. policymakers.
Economic recovery has spread wide, with 34 states reaching new employment highs this year and thousands of counties now close to unemployment rates of the boom years earlier this decade, according to a Reuters analysis of federal data.
The U.S. Federal Reserve has played a central role in engineering that recovery and has become progressively less worried about the nation's job market, interpreting the slowdown in payrolls' growth as a sign of near-full employment.
But Russell's abandoned headquarters in Alexander City stands as a reminder of forces the Fed's massive easy money campaign is ill-equipped to confront. What is needed now is more akin to hand-to-hand combat, state and local officials say.
What Alexander City could use, for example, is a $4 million rail spur to connect its industrial parks with the nearby rail line, or more state help in paying the grading and utility connection costs to entice would-be investors, says former mayor Don McClellan.
Or perhaps, he suggests, programs to boost the community college's retraining of mid-career workers among thousands who lost jobs as Russell's operations wound down for good after a 2006 takeover by Berkshire HathawayBRKa.N.
"It is much harder to recruit here," says McClellan, now regional development chief.
"When the state lands white collar jobs, it is in the metro areas." Continued...