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New Hampshire has one of the tightest labor markets in the country. The state’s unemployment rate was just 2.1 percent in April, while the national average was 3.4 percent. That has helped to drive wages higher — but not in a way that consumers have found particularly meaningful.
About half of Granite Staters view their household’s financial condition as worse off now than a year ago, according to a Business and Industry Association report on consumer confidence released last week by the University of New Hampshire Survey Center.
That’s better than the past couple of quarters but still very high compared to the past decade. And most expect their personal finances to be the same or worse a year from now. Any wage-earner who buys groceries, fuel, or other day-to-day necessities knows what’s driving this sense of pessimism about the economy.
“Inflation is really taking a toll on people,” said Susan M. Collins, president and CEO of the Federal Reserve Bank of Boston.
Collins, whose district in the Federal Reserve System covers almost all of New England, visited New Hampshire recently to speak with stakeholders about their economic challenges and experiences. While in Manchester, she spoke with the Globe about her views on the Fed’s mission to bring inflation back down to a more sustainable level.
“I really see the work that we’re doing as geared towards getting us back to an environment like we had pre-pandemic, where wage increases were real wage increases … that’s the kind of environment that actually helps workers,” she said.
Collins isn’t a voting member this year on the committee that adjusts interest rates, but she represents her district and contributes to policy discussions. And she has an optimistic message about whether the Fed can rein in inflation without overdoing it.
“I do think that we’ll need some increase in unemployment to be able to kind of cool labor markets a bit and release some of the pressure on wages and prices, but I do see a pathway for doing that without a significant downturn, and I would expect that to be true here in New Hampshire as well,” she said.
“There’s still a lot of resilience in our economy, and the data suggests that that’s very true here in New Hampshire,” she added.
A big question ahead of the Fed’s meeting this month is whether officials will pause the series of rate hikes they have been making since early 2022. Collins has said the economy “may be at, or near, the point " where that pause can happen, giving more time to assess the lagging impacts of the Fed’s actions so far.