Philadelphia Federal Reserve Bank president Patrick Harker, in a talk to the Greater Philadelphia chamber of commerce this morning -- he took a minute to praise Drexel chief John Fry, the new Chamber chair, who worked with Harker at Penn in the 90s, and construction magnate Emily Bittenbender, winner of this year's Chamber Paradigm award -- laid out his view of factors affecting the perennially slow-growing Philadelphia regional economy. Highlights from Harker's speech: 

The big picture - Economic fundamentals are sound, and our financial system is in good shape. Labor markets remain dynamic, income growth is solid, and consumer spending continues to increase at a solid pace. 

Risks
 - If there is anything... the strong dollar and weakening growth in China...

Stocks
 - Despite the volatility, equity prices are pretty much where they started at the beginning of the year.... Recent signs are pointing to a bottoming out in manufacturing activity. And China is not our major trading partner. I remain optimistic that solid fundamentals will be the overriding determinant of future U.S. economic activity.

Don't Panic - As a policymaker, I think it is important to take a long-term view rather than to react to short-term volatility... Over the longer run, I am relatively optimistic.

A little more inflation would be a good thing - Inflation continued to run below the [Fed Open Market Committee's] 2 percent target in 2015...  Once energy prices stabilize and start reversing, inflation will return to our 2 percent target...

But let's not boost interest rates -- As Fed Chair Janet Yellen has emphasized, [low inflation expectations] would make attaining our inflation target harder to achieve... We have been below our inflation target for all but two years since 2008. [Being wrong all the time] will eventually lead to a lack of credibility for our 2 percent goal. Hence, it may be worth erring on the side of accommodation [cheap money] to ensure against that outcome...

Skilled wages heading up - There is a good deal of anecdotal evidence that firms are planning to raise wages, especially for jobs that are proving to be hard to fill. I do expect some faster wage growth going forward, and accelerating wage growth could translate into more robust inflation...

Energy price will rise, because it can't get much cheaper - It is unlikely that oil prices will continue to drop, and eventually, they will contribute rather than detract from inflation.

Monetary policy: My approach to policy is to conduct it in ways that will best serve our dual mandate of maximum employment and price stability.

Given the behavior of oil prices, inflation is likely to be quite low in the first quarter of the year, probably even negative.

Full employment: Regarding the employment side of our mandate, I believe we will attain our goal early this year [unemployment below 5 percent],, if we have not attained it already.

Inflation will take care of itself: Over the medium term, I remain confident that inflation will return to target. Math is in our favor: Energy prices would need to fall again and, by a similar magnitude, to renew their downward pressure on inflation.... Inflation should naturally rebound [since energy prices can't get lower.]

Import prices should stabilize as the dollar does, removing another source of downward pressure on inflation. Granted, this process will take some time as the price cuts are transmitted across the economy.

Although I remain confident that inflation will return to the Committee's 2 percent target, my outlook sees it doing so only gradually... Global [problems]... make me a bit more conservative...

It might prove prudent to wait until the inflation data are stronger before we undertake a second rate hike.... I am approaching near-term policy more cautiously than I did a few months ago. That is part of being data dependent...

Later this year, back to normal: As we move into the second half of the year with economic activity growing at trend or slightly above trend, the unemployment rate below its natural rate, and price pressures starting to assert themselves, policy can truly normalize...

Rates won't go up that much: That would not necessarily imply an overly aggressive path for policy. Thus, it will take fewer rate hikes to attain neutrality in policy than it would have 15 years ago. By historical standards, that in itself implies a somewhat shallower path for interest rates than was typical of past recoveries.

Real estate:. The demand for housing has picked up, and prices of houses and especially rentals are growing strongly... Philadelphia is seeing this same kind of urban gentrification [that started in New York and San Francisco].

Center City the new bedroom community: Much has been written about the influx of millennials to Center City as well as the challenges of keeping them here. Good schools, jobs, and competitive tax structures are critical.

Since 1992, census data show a dramatic rise in the proportion of urban versus suburban housing construction. We looked at Philadelphia and seven surrounding counties over the past few decades:

From 2013 through 2015, nearly 40 percent of all residential building permits were in the cities of Philadelphia and Camden. This is a significant shift since the building permits were as low as 2 percent in 1992...

This residential growth has been accompanied by office growth as well. [Not documented here!] This has boosted both an improving daytime and nighttime population, which creates a vibrant city on a 24-hour basis.

Rich people live downtown: According to the Center City District and Central Philadelphia Development Corporation, the average household income for core Center City residents is more than $100,000. This has increased the demand for retail and is prompting the development of other sites on Market East.

Major construction:  The $1.2 billion Comcast Innovation & Technology Center, the largest planned project in the city's history; Drexel University and Brandywine Realty Trust's recently announced the 8-million-square-foot Schuylkill Yards mixed-use project; The Navy Yard [office center], which just celebrated its 10th anniversary with close to 12,000 workers, and is breaking ground on its 14th new office building; and finally, the $800 million urban center slated for Camden's waterfront...

I am particularly excited about the vision of this project and how it will create a new daytime workforce and new jobs for city residents. I toured Camden last week with Mayor Dana Redd... It is wonderful to see the recent shift in momentum there....

No price pressure here: Despite our region's recent growth, we are seeing little evidence of widespread construction-related cost pressures for either materials or labor.

Weak global demand has been driving energy and commodity prices lower this past year. In fact, material costs have fallen as a result as well as the cost of transporting these supplies.

As long as current global market conditions remain, I do not anticipate any significant movement in these prices in 2016. I expect construction costs to increase at or below that of the general economy in the near term. Further, labor costs are generally rising in step with that of the general economy...

Consumer spending:  Robust employment growth, increased disposable income, and fairly healthy household balance sheets should cause consumption to grow this year by 2.7 percent, and it is the consumer who will underpin the economic progress in my forecast.

New jobs:  Each of the past three years has witnessed the creation of more than 2 million net new jobs, and many of those jobs were in highly skilled professions... Employment growth will slow somewhat, [but] I am still expecting a year in which the economy creates in the neighborhood of 2 million net new jobs. We are well on pace to reach this target...

Skilled worker shortage, even in Phila. area: In my meetings around the District [eastern Pa., South Jersey, Delaware], I often hear employers lament about the difficulty in finding the right workers.

While recruiting and attracting talent is becoming more challenging for many of your organizations, it is also a sign of the steady improvements and resiliency of our labor markets.... I anticipate stronger wage growth than the 2 percent or so that we achieved last year. Workers returning to the labor force have also boosted the participation rate for three consecutive months, and we are now just shy of 63 percent....

The participation rate began trending down from its peak value of 67.3 in 2000 as baby boomers started their transition from work to retirement...

The overall strength in job growth could bring the unemployment ratedown to 4.7 percent by year-end.

So why are so many people not even looking for jobs? We must all take an active role in developing our future workforce.... There are more than 106,000 young people aged 16 to 24 in Greater Philadelphia who are not in school and not working. Over the past 15 years, the participation of young people in the labor force has declined from 66 percent to 55 percent. We need to invest in this untapped resource... [for example with] YouthBuild Philadelphia Charter School [which teaches building trades]... We need to support the growth of opportunity occupations through apprenticeships and mentorship programs that provide training and guidance...

One of my primary focuses as president of the Federal Reserve Bank of Philadelphia is on exploring ways to strengthen the Third District in the area of workforce development.