Overview of the Regional Economy Jason Bram, Research Officer - PowerPoint PPT Presentation

Overview of the Regional Economy Jason Bram, Research Officer Presentation to the Community Depository Institutions Advisory Council (CDIAC) March 5, 2019 The views expressed here are those of the presenter and do not necessarily represent those of the Federal Reserve Bank of New York or the Federal Reserve System.

Recent Private-Sector Job Trends Year-Over-Year Percent Change as of December 2018 WA ME MT ND OR VT MN NH ID WI SD NY MA WY RI MI CT IA PA NJ NE NV OH DE IN UT IL MD CA CO WV VA KS MO KY NC TN OK AZ AR NM SC GA AL MS TX LA AK FL HI PR Down Flat Up to 1.25% Up 1.25% to 2% Up More Than 2% Source: Bureau of Labor Statistics and Moody's Economy.com. 1

Private-Sector Job Trends Percent Change From Previous Peak to December 2018 WA ME MT ND OR VT MN NH ID WI SD NY MA WY RI MI CT IA PA NJ NE NV OH DE IN UT IL MD CA CO WV VA KS MO KY NC TN OK AZ AR NM SC GA AL MS TX LA AK FL HI PR Down Flat Up to 3% Up 3% to 7% Up More Than 7% Source: Bureau of Labor Statistics and Moody's Economy.com. 2

Current Economic Conditions FRBNY Business Surveys, Current Conditions Diffusion Index 60 40 Empire State Manufacturing Survey 20 Feb 0 -20 Business Leaders Survey -40 Shading indicates NBER recession -60 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: Federal Reserve Bank of New York. 3

Future Economic Conditions FRBNY Business Surveys, Conditions Six Months Ahead Diffusion Index 60 Empire State Manufacturing Survey 40 Feb 20 0 Business Leaders Survey -20 -40 Shading indicates NBER recession -60 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: Federal Reserve Bank of New York. 4

Unemployment Rates Seasonally Adjusted Percent 12 10 New York City New Jersey 8 6 United States 4 New York State 2 Shading indicates NBER recession 0 1990 1994 1998 2002 2006 2010 2014 2018 2022 Source: Bureau of Labor Statistics and Moody's Economy.com. 5

Labor Force Participation Seasonally Adjusted Percent 70 United States New Jersey 65 New York State Jan Dec New York City 60 Shading indicates NBER recession 55 1990 1994 1998 2002 2006 2010 2014 2018 2022 Source: Bureau of Labor Statistics and Moody's Economy.com. 6

Total Employment Seasonally Adjusted Index Index (Dec2007=100) 130 New York City Dec 120 New York 110 Jan United States 100 New Jersey 90 Puerto Rico Shading indicates NBER recession 80 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: Bureau of Labor Statistics and Moody's Economy.com; data are early benchmarked by FRBNY staff. 7

Total Employment Seasonally Adjusted Index Index (Dec2007=100) 125 120 115 110 Jan 105 United States Dec Albany 100 Upstate Utica 95 Glens Falls Shading indicates NBER recession 90 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: Bureau of Labor Statistics and Moody's Economy.com; data are early benchmarked by FRBNY staff. 8

Total Employment Seasonally Adjusted Index Index (Dec2007=100) 125 120 Dec 115 110 Jan 105 United States Downstate 100 Oran-Rock-West Kingston 95 Dutchess-Putnam Shading indicates NBER recession 90 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: Bureau of Labor Statistics and Moody's Economy.com; data are early benchmarked by FRBNY staff. 9

Total Employment Seasonally Adjusted Index Index (Dec2007=100) 120 115 Ithaca 110 Jan United States 105 Dec Upstate 100 95 Binghamton 90 Elmira Shading indicates NBER recession 85 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: Bureau of Labor Statistics and Moody's Economy.com; data are early benchmarked by FRBNY staff. 10

Total Employment Seasonally Adjusted Index Index (Dec2007=100) 120 115 United States 110 Jan Rochester Buffalo 105 Dec Upstate 100 Syracuse 95 90 Shading indicates NBER recession 85 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: Bureau of Labor Statistics and Moody's Economy.com; data are early benchmarked by FRBNY staff. 11

Total Employment Seasonally Adjusted Index Index (Dec2007=100) 125 120 115 110 Jan 105 Berg-Huds-Pass United States Dec NNJ Mid-Mon-Ocean 100 Newark metro 95 Shading indicates NBER recession 90 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: Bureau of Labor Statistics and Moody's Economy.com; data are early benchmarked by FRBNY staff. 12

Total Employment Seasonally Adjusted Index Index (Dec2007=100) 125 Dec New York City 120 115 United States 110 Jan Long Island 105 Orange-Rockland -Westchester 100 Fairfield 95 Shading indicates NBER recession 90 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: Bureau of Labor Statistics and Moody's Economy.com; data are early benchmarked by FRBNY staff. 13

Employment Trends In and Around NYC Private-Sector Job Growth – First Half of 2018 vs First Half of 2017 Ulster Dutchess Up more than 2.5% Up 1.6% to 2.5% Up 0.6% to 1.5% Orange Up 0.5% or less Putnam Down Fairfield Westchester Sussex Rockland Passaic Bergen Warren Morris Bronx Suffolk Essex Nassau Queens Union Kings Hunterdon Somerset Middlesex Monmouth Source: Bureau of Labor Statistics and Moody’s Economy.com. 14

NYC Securities Employment Seasonally Adjusted Levels Thousands Thousands 290 4,500 Shading indicates time between securities peak and trough 230 4,000 Securities Employment Total Employment Minus Securities (left axis) Dec (right axis) 170 3,500 110 3,000 50 2,500 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Source: Bureau of Labor Statistics, Moody's Economy.com, and FRBNY calculations. 15 15

NYC Tech and Securities Employment Thousands of Jobs Thousands 200 +18,000 150 Jan10 to Jun18 Securities +74,000 Employment 100 Technology Employment Technology Employment • Computer manufacturing • Electronic shopping 50 • Software publishing • Data processing, hosting • Internet/web search portals • Internet publishing • Computer systems design • Scientific R&D services Shading indicates NBER recession 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Source: U.S. Bureau of Labor Statistics (QCEW) and Moody’s Economy.com.; FRBNY Calculations 16 16 .

New York State Wages by County Average Weekly Wages, Leisure & Hospitality, 1 st Half of 2018 $361 (80%) $288 (100%) $407 $325 or Less (71%) NY State Average=$622 $325 to $425 $709 Median Weekly Wage $425 to $525 (55%) (Min wage % of Median*) $525 or More * Assuming 26-hour week) $409 Sources: Bureau of Labor Statistics, Moody’s Economy.com, New York State Department of Labor, (95%) FRBNY calculations. 17

Sources: Bureau of Labor Statistics, Moody’s Economy.com, New York State Department of Labor, FRBNY calculations. 18

Home Prices CoreLogic Home Price Index, Seasonally Adjusted Index (Mar2006=100) 180 Kings 160 Manhattan 140 Queens 120 Nassau Dec 100 Suffolk 80 United States Shading indicates NBER recession 60 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: CoreLogic Home Price Index (including distressed sales). 19

Home Prices CoreLogic Home Price Index, Seasonally Adjusted Index (Mar2006=100) 160 Buffalo 140 Upstate NY 120 Rochester Albany Dec 100 United States 80 Shading indicates NBER recession 60 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: CoreLogic Home Price Index (including distressed sales). 20

Update on Puerto Rico & US Virgin Islands • By last September (a year after the hurricanes), Puerto Rico’s economy and employment had essentially fully rebounded. – Follows a fairly typical pattern after major disasters. – Job shortfalls persist in government, leisure & hospitality, retail, health, and education. – In contrast, employment rose to new highs in construction and professional & business services; unemployment is near a record low. • The US Virgin Islands saw much steeper job losses and less of a rebound. – Employment still down roughly 8% more than a year after Irma & Maria. – The key tourism sector remains depressed — leisure & hospitality employment is still down 40%, accounting for 2/3 of the net job shortfall. 21

Employment Paths Post-Hurricanes Index (Month Before Hurricane = 100) 105 USVI Hugo (1989) 100 Index (Month before hurricane = 100) PR Maria (2017) USVI Marilyn (1995) 95 USVI Irma/Maria (2017) 90 85 New Orleans Metro Katrina (2005) 80 75 70 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Months before/after hurricane Source: U.S. Bureau of Labor Statistics, Moody’s Economy.com, and FRBNY staff calculations. 22