Special Update: The State of the New York City Economy Jason Bram, Senior Economist, Microeconomic and Regional Studies Function, FEDERAL RESERVE BANK OF NEW YORK
Green Pearl Events Multifamily Investment Summit State Of Nyc Economy
Nov 12, 2014
Green Pearl Events Multifamily Investment Summit State Of NYC Economy
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Special Update: The State of the New York City Economy
Jason Bram,Senior Economist, Microeconomic and Regional Studies Function, FEDERAL RESERVE BANK OF NEW YORK
90
100
110
120
130
140
150
160
170
1985 1990 1995 2000 2005
90
100
110
120
130
140
150
160
170
Index of Coincident Economic IndicatorsIndex: July 1992 = 100 Index: July 1992 = 100
Source: FRBNY Note: Shading represents local economic downturns.
NY
NJ
NYC
0
3
6
9
12
15
1976 1981 1986 1991 1996 2001 2006
0
3
6
9
12
15
Unemployment Rate: USA vs. RegionPercent of Labor Force Percent of Labor Force
Source: NYS Dept. of Labor and FRBNY staff calculations Note: Shading represents U.S. recessions.
NYC
US
NJ
NY
-8
-6
-4
-2
0
2
4
6
8
1968 1976 1984 1992 2000 2008
-8
-6
-4
-2
0
2
4
6
8
Private Sector Job Growth: U.S. and NYC12-Month Percent Change in Private Sector EmploymentPercent Percent
Source: Bureau of Labor Statistics and Moody's Economy.com
U.S. NYC
0%
5%
10%
15%
20%
25%
30%
35%
40%
1972 1987 2000 2007 US2007
1972 1987 2000 2007 US2007
Finance ex-Securities
Securities
Finance Sector’s Share of NYC Employment and Earnings
NYC Employment NYC Earnings
2,400
2,500
2,600
2,700
2,800
2,900
3,000
3,100
3,200
3,300
1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 2008
40
60
80
100
120
140
160
180
200
220
NYC Employment: Securities and All OtherThousands Thousands
Source: NYS Dept. of Labor and FRBNY staff calculations Note: Shading represents U.S. recessions.
NYC Employment excluding Securities (right axis)
NYC Securities Industry
Employment (left axis)
3,000
3,200
3,400
3,600
3,800
4,000
1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
3,000
3,200
3,400
3,600
3,800
4,000
NYC EmploymentThousands Thousands
Source: NYS Dept. of Labor and FRBNY staff calculations Note: Shading represents local economic downturns.
Total Employment
2001-2003
1969-1976 1989-1992
3,000
3,200
3,400
3,600
3,800
4,000
1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
3,000
3,200
3,400
3,600
3,800
4,000
NYC EmploymentThousands Thousands
Source: NYS Dept. of Labor and FRBNY staff calculations Note: Shading represents local economic downturns.
Total Employment
2001-2003scenario
2001-2003
1969-1976 1989-1992
3,000
3,200
3,400
3,600
3,800
4,000
1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
3,000
3,200
3,400
3,600
3,800
4,000
NYC EmploymentThousands Thousands
Source: NYS Dept. of Labor and FRBNY staff calculations Note: Shading represents local economic downturns.
Total Employment
2001-2003scenario
2001-2003
1969-1976 1989-1992
1989-1992scenario
Job Losses in Previous Major Financial Downturns (peak to trough) in New York City
Downturn
Decline in Securities Industry
Employment
Decline in Financial Sector
Employment
Decline in Total Private-Sector Employment
August 1969 –
May 1976
49,000
(40%)
60,000
(13%)
601,000(18%)
September 1987 – June 1993
39,000
(21%)
96,000
(17%)
343,000
(11%)
December 2000 – October 2003
39,000
(19%)
60,000
(12%)
229,000
(7%)
March 2008 —Oct.. 2009 (so far)
31,500(15%)
43,500(9%)
132,000(4%)
-30%
-20%
-10%
0%
10%
20%
30%
40%
1970 1975 1980 1985 1990 1995 2000 2005
-30%
-20%
-10%
0%
10%
20%
30%
40%
Annual Change in Real Earnings: NYC and U.S.
Source: BEA
US: All Industries
NYC: All Industries
NYC: Securities
-30
-20
-10
0
10
20
30
40
50
1988 1992 1996 2000 2004 2008
-30
-20
-10
0
10
20
30
40
50
House and Apartment Prices: U.S. and Region4-Quarter % Change 4-Quarter % Change
Source: S & P / Case Shiller; Miller Samuel, FRBNY staff calculations
Recent figures for apartment price are based on resales only.
House Price Index: NY Metro
House Prices Index: U.S.
Avg. Apartment Price:
Manhattan
Summary• After past local & financial downturns, NYC’s economy
has typically turned the corner 1-2 years after the US.
• NYC has become increasingly dependent on high income securities sector
• The effects of the financial turmoil continue to affect employment and income.
• Past financial downturns have led to job losses of up to 17% and income declines of more than 30%; this one doesn’t seem to have been that severe, thus far.
Special Update: The State of the New York City Economy
Jason Bram,Senior Economist, Microeconomic and Regional Studies Function, FEDERAL RESERVE BANK OF NEW YORK
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