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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

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SLIDE 1

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.

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SLIDE 2

Recent Private-Sector Job Trends

Year-Over-Year Percent Change as of December 2018

AL 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.

AK FL HI PR AZ AR CA CO CT NJ DE MD GA ID IL IN IA KS KY LA ME VT NH MA RI MI MN MS MO MT NE NV NM NY NC ND OH OK OR PA SC SD TN TX UT VA WA WV WI WY

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SLIDE 3

Private-Sector Job Trends

Percent Change From Previous Peak to December 2018

AL Down Flat Up to 3% Up 3% to 7% Up More Than 7%

Source: Bureau of Labor Statistics and Moody's Economy.com.

AK FL HI PR AZ AR CA CO CT NJ DE MD GA ID IL IN IA KS KY LA ME VT NH MA RI MI MN MS MO MT NE NV NM NY NC ND OH OK OR PA SC SD TN TX UT VA WA WV WI WY

2

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SLIDE 4
  • 60
  • 40
  • 20

20 40 2007 2008 2009

Shading indicates NBER recession

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Empire State Manufacturing Survey Business Leaders Survey

Current Economic Conditions

FRBNY Business Surveys, Current Conditions

Diffusion Index 60

Source: Federal Reserve Bank of New York.

Feb

3

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SLIDE 5
  • 60
  • 40
  • 20

20 40 60 2007 2008 2009

Shading indicates NBER recession

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Empire State Manufacturing Survey Business Leaders Survey

Future Economic Conditions

FRBNY Business Surveys, Conditions Six Months Ahead

Diffusion Index

Source: Federal Reserve Bank of New York.

Feb

4

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SLIDE 6

2 4 6 8 10 12 1990

Shading indicates NBER recession

1994 1998 2002 2006 2010 2014 2018 2022

New York State New York City United States New Jersey

Unemployment Rates

Seasonally Adjusted

Source: Bureau of Labor Statistics and Moody's Economy.com.

Percent 5

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SLIDE 7

55 60 65 70 1990

Shading indicates NBER recession

1994 1998 2002 2006 2010 2014 2018 2022

New York State New York City United States New Jersey

Labor Force Participation

Seasonally Adjusted

Jan

Source: Bureau of Labor Statistics and Moody's Economy.com.

Dec

Percent 6

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SLIDE 8

80 90 100 110 120 130 2007 2008 2009

Shading indicates NBER recession

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

New York New York City United States New Jersey Puerto Rico

Total Employment

Seasonally Adjusted Index

Jan

Source: Bureau of Labor Statistics and Moody's Economy.com; data are early benchmarked by FRBNY staff.

Dec

Index (Dec2007=100) 7

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SLIDE 9

90 95 100 105 110 115 120 125 2007 2008 2009 2018 2019 2020

Total Employment

Shading indicates NBER recession

2010 2011 2012 2013 2014 2015 2016 2017

United States Upstate Glens Falls Albany Utica

Seasonally Adjusted Index

Jan

Source: Bureau of Labor Statistics and Moody's Economy.com; data are early benchmarked by FRBNY staff.

Dec

Index (Dec2007=100) 8

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SLIDE 10

90 95 100 105 110 115 120 125 2007 2008 2009 2018 2019 2020

Total Employment

Shading indicates NBER recession

2010 2011 2012 2013 2014 2015 2016 2017

Dutchess-Putnam Downstate United States Kingston Oran-Rock-West

Seasonally Adjusted Index

Jan

Source: Bureau of Labor Statistics and Moody's Economy.com; data are early benchmarked by FRBNY staff.

Dec

Index (Dec2007=100) 9

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SLIDE 11

85 90 95 100 105 110 115 120 2007 2008 2009 2018 2019 2020

Total Employment

Shading indicates NBER recession

2010 2011 2012 2013 2014 2015 2016 2017

United States Upstate Ithaca Binghamton Elmira

Seasonally Adjusted Index

Jan

Source: Bureau of Labor Statistics and Moody's Economy.com; data are early benchmarked by FRBNY staff.

Dec

Index (Dec2007=100) 10

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SLIDE 12

85 90 95 100 105 110 115 120 2007 2008 2009 2018 2019 2020

Total Employment

Shading indicates NBER recession

2010 2011 2012 2013 2014 2015 2016 2017

United States Upstate Rochester Buffalo Syracuse

Seasonally Adjusted Index

Jan

Source: Bureau of Labor Statistics and Moody's Economy.com; data are early benchmarked by FRBNY staff.

Dec

Index (Dec2007=100) 11

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SLIDE 13

90 95 100 105 110 115 120 125 2007 2008 2009 2018 2019 2020

Total Employment

Shading indicates NBER recession

2010 2011 2012 2013 2014 2015 2016 2017

Berg-Huds-Pass NNJ United States Newark metro Mid-Mon-Ocean

Seasonally Adjusted Index

Jan

Source: Bureau of Labor Statistics and Moody's Economy.com; data are early benchmarked by FRBNY staff.

Dec

Index (Dec2007=100) 12

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SLIDE 14

90 95 100 105 110 115 120 125 2007 2008 2009 2018 2019 2020

Total Employment

Shading indicates NBER recession

2010 2011 2012 2013 2014 2015 2016 2017

Orange-Rockland

  • Westchester

New York City Long Island United States Fairfield

Seasonally Adjusted Index

Jan

Source: Bureau of Labor Statistics and Moody's Economy.com; data are early benchmarked by FRBNY staff.

Dec

Index (Dec2007=100) 13

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SLIDE 15

Source: Bureau of Labor Statistics and Moody’s Economy.com.

Employment Trends In and Around NYC

Private-Sector Job Growth – First Half of 2018 vs First Half of 2017

14

Up more than 2.5% Up 1.6% to 2.5% Up 0.6% to 1.5% Up 0.5% or less Down

Ulster Dutchess Putnam Westchester Fairfield Orange Rockland Bergen Passaic Sussex Morris Essex Union Suffolk Nassau Queens Kings

Bronx

Monmouth Middlesex Somerset Hunterdon Warren

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SLIDE 16

Shading indicates time between securities peak and trough

Securities Employment

(left axis)

Total Employment Minus Securities

(right axis)

50 110 170 230 290 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2,500 3,000 3,500 4,000 4,500

NYC Securities Employment

Seasonally Adjusted Levels

Dec

Source: Bureau of Labor Statistics, Moody's Economy.com, and FRBNY calculations.

Thousands Thousands 15 15

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SLIDE 17

NYC Tech and Securities Employment

Thousands of Jobs

16

Source: U.S. Bureau of Labor Statistics (QCEW) and Moody’s Economy.com.; FRBNY Calculations .

50 100 150 200 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Jan10 to Jun18

+74,000 +18,000

Thousands

Shading indicates NBER recession Technology Employment

  • Computer manufacturing
  • Electronic shopping
  • Software publishing
  • Data processing, hosting
  • Internet/web search portals
  • Internet publishing
  • Computer systems design
  • Scientific R&D services

Securities Employment Technology Employment

16

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SLIDE 18

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

New York State Wages by County

Average Weekly Wages, Leisure & Hospitality, 1st Half of 2018

17

$325 or Less $325 to $425 $425 to $525 $525 or More NY State Average=$622

$288 (100%) $361 (80%) $709 (55%) $409 (95%) $407 (71%) Median Weekly Wage (Min wage % of Median*) * Assuming 26-hour week)

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SLIDE 19

18

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

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SLIDE 20

60 80 100 120 140 160 2006 2007 2008 2009

Shading indicates NBER recession

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Suffolk United States Kings Nassau Queens Manhattan

Home Prices

CoreLogic Home Price Index, Seasonally Adjusted

Index (Mar2006=100) 180

Source: CoreLogic Home Price Index (including distressed sales).

Dec

19

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SLIDE 21

60 80 100 120 140 2006 2007 2008 2009

Shading indicates NBER recession

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

United States Albany Rochester Upstate NY Buffalo

Home Prices

CoreLogic Home Price Index, Seasonally Adjusted

Index (Mar2006=100) 160

Source: CoreLogic Home Price Index (including distressed sales).

Dec

20

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SLIDE 22

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
  • f 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

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SLIDE 23

70 75 80 85 90 95 100 105

  • 3
  • 2
  • 1

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Index (Month before hurricane = 100)

Months before/after hurricane

Employment Paths Post-Hurricanes

Index (Month Before Hurricane = 100)

USVI Hugo (1989)

USVI Irma/Maria (2017) PR Maria (2017)

USVI Marilyn (1995) New Orleans Metro Katrina (2005)

22

Source: U.S. Bureau of Labor Statistics, Moody’s Economy.com, and FRBNY staff calculations.

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SLIDE 24

Regional Recap

  • Business sentiment rebounded in February, following a slump.
  • NYC continues to lead the region in job growth.
  • Fairfield County and much of upstate New York have lagged.
  • Even in the weakest areas, unemployment is near record lows.
  • NYC’s key securities industry has barely contributed to the

city’s boom; but brisk growth in a variety of other sectors, notably tech, has contributed to a broad-based expansion.

  • Home prices appear to have leveled off across much of the

District.

  • Puerto Rico’s economy has rebounded, while the USVI’s

remains depressed.

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