With a wary eye, employers, employees and the nation as a whole are looking ahead in the new year to try to figure out exactly what the economy will bring for 2012 and beyond.

Understanding exactly where the U.S. is in its recovery, the economic outlook, and what all of the events currently transpiring on the economic and employment horizon mean, is a large part of helping people understand when we might see better days, and how we as a nation might speed up the recovery from this past recession.

In a joint effort by the chambers of commerce of Wooster, Orrville and Holmes County, Sandra Pianalto, president and chief executive officer of the Federal Reserve Bank of Cleveland, was on hand at Fisher Auditorium in Wooster on Tuesday, Jan. 10, to address a large crowd about the nation’s employment outlook and monetary policies that will shape the near future.

Jeff Griffin, Wooster Chamber president, who provided the opening introduction, Shasta Mast, Holmes County Chamber executive director, and Jenni Reusser, Orrville Chamber president, joined Commercial & Savings Bank (CSB) chief executive director Eddie Steiner, who was instrumental in getting Pianalto to speak at Wooster in this joint Chamber effort with CSB, and Pianalto on stage.

Steiner is a member of the Community Depository Institutions Advisory Council, and through that group has gotten to know Pianalto. Knowing that she enjoys the opportunity to connect with people within her district as often as possible to keep them informed, Steiner contacted Pianalto and asked her to speak in Wooster, and she quickly obliged.

“Sandy loves to get out and speak, but she has a huge district, and she is extremely busy, so it was a real thrill to have her come here and speak to us,” said Steiner.

With a nice sized crowd on hand, Pianalto focused on the state of both Ohio and the nation concerning the outlook for employment and the monetary policies that will drive the nation forward in 2012.

Pianalto praised the Wayne and Holmes County area for having something that many communities do not have in their business realm.

“You have a really great balance in your economy,” said Pianalto. “By that I mean you have a great deal of diversity, and that diversity brings strength. But I think all of us understand that your local economy would definitely benefit from a stronger national economy.”

Pianalto began by giving a brief recap as to what the Federal Reserve does, and spoke about how the Federal Reserve has aggressively tried to prevent a downward spiral in the economy, taking steps geared toward generating stable prices and maximum employment possibilities.

“The Federal Reserve has taken unprecedented steps to avoid another Great Depression,” said Pianalto. “And we have continued to act aggressively to promote economic growth while maintaining price stability.”

That said, Pianalto launched into her belief as to why the current state of unemployment remains so high.

She said that what has been directly related to the unemployment numbers is the nation struggling to recover from this past recession, a recovery, she noted, that has been frustratingly slow for a number of reasons. According to Pianalto, the components of the slow recovery from the recession include a struggling housing market that continues to be depressed, the government sector, which has reduced spending and cut back on employment, and the volatile economic situation in Europe, which creates trends in the U.S.

“Uncertainty in the public is also holding back growth,” said Pianalto. “I spend a lot of time talking to business people, and almost without exception, they tell me that uncertainty is making them more cautious.”

Other issues include the resolution of federal, state and local budget problems, which she said will translate into changes in staff and spending policies. In addition, she noted that there are regulatory issues concerning health care, the environment and financial reform.

But above all, Pianalto said, from what she has heard from business owners, the biggest problem to date concerning an economic recovery is a weak demand for goods and services.

“That is the primary reason why businesses are not growing, expanding and hiring new workers,” said Pianalto. “Consumer spending has been much softer than is usual in a recovery. Consumer spending has run about half as much in this recovery as it did in previous recoveries. The consumer is very important to our economy and spending patterns of consumers is critical to the overall economic performance, and in this recovery, consumers have had to deal with high unemployment, reducing their debt levels and they are saving more.”

Given those factors, Pianalto said that the economic recovery continues to be moderate. Her outlook for growth for 2012 is about two and a half percent this year and three percent next year.

Concerning the rate of unemployment, Pianalto said the goal of the Federal Reserve is not to eliminate it completely, noting that would be an impossibility, but instead to focus on getting the rate down to what she called the natural rate of unemployment, which is six percent, the current rate hovering near nine percent.

She said based on the current state of the economy, and the sluggishness of the recovery, an optimistic outlook in returning to that natural rate will take between four and five years, not a faltering number, but one she said was obtainable.

“We lost more than nine million jobs during the recession, and that nearly doubled the unemployment rate,” said Pianalto. “That is a big hole to dig ourselves out of. Four years could be conservative.”

Based on a forecast of small but steady improvement over the next year and into the following several years, Pianalto said there are positives to take from the state of the economy in the nation and in Ohio. She alluded to the fact that Ohio in particular has shown strong progress in the fields of health care and alternative energy, two areas where she expects growth to take place.

She said that innovation is going to pay dividends for Ohioans, but added that Ohioans must continue to set the bar high in terms of education, which will promote the process of recovery and create skilled laborers in those fields.

“We’ve got to stay focused on making sure we have proper training and educational facilities, and the proper kind of training in place,” said Pianalto.

Following the seminar, Pianalto opened the floor to anyone who had questions, and several members of the audience asked intriguing questions that Pianalto handled well. After the event, she joined a number of local business members for a luncheon, after having provided a great deal of insight as to where the nation stands in economic terms.

“I think it was a lot of what we have heard already, but she explained it in a much clearer way,” said Roc Baker. “It was good to hear her talk about where we stand. I am excited about the energy side of what she talked about, with Union Shale. That is one thing that can really help us out.

“It looks like we may be at bottom or close to bottom, and we should be easing out of it, although I don’t think the recovery is as fast as any of us want it to be.”