Regional Economic Conditions Jason Bram, Research Officer Community Advisory Group Meeting March 29, 2018 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.
Private-Sector Job Trends Percent Change From Previous Peak to February 2018 WA MT ND ME CA OR NV ID UT WY CO SD NE KS MN IA MO WI IL MI OH IN KY WV PA VA NY VT NH MA RI CT NJ DE MD AZ NM OK AR TN SC NC MS AL GA AK TX LA 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. 1
Recent Private-Sector Job Trends Year-Over-Year Percent Change as of February 2018 WA MT ND ME CA OR NV ID UT WY CO SD NE KS MN IA MO WI IL MI OH IN KY WV PA VA NY VT NH MA RI CT NJ DE MD AZ NM OK AR TN SC NC MS AL GA AK TX LA 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. 2
Dutchess- Putnam Recent Job Growth in the Region Percent Change from 2017 to 2018, Year-to-Date (Jan-Feb) Strong Growth (>1.5%) Modest Growth (1.0-1.5%) Slow Growth (0.3-1.0%) Little or No Change (<0.3%) Moderate Decline (-2% or less) Steep Decline (more than -2%) Buffalo Rochester Watertown Syracuse Utica Glens Falls Albany Ithaca Elmira Binghamton Kingston Puerto Rico Puerto Rico & U.S. Virgin Islands U.S. Virgin Islands Orange- Rockland- Westchester Bergen- Hudson- Passaic Newark Source: Bureau of Labor Statistics and Moody s Economy.com. Middlesex Monmouth Ocean NYC 3
Current Economic Conditions FRBNY Business Surveys, Current Conditions 60 Diffusion Index 40 20 Empire State Manufacturing Survey 0 Mar -20 Business Leaders Survey -40-60 2007 2008 2009 Source: Federal Reserve Bank of New York. Shading indicates NBER recession 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 4
Unemployment Rates Seasonally Adjusted 12 Percent 10 New York City New Jersey 8 6 United States 4 New York State Feb 2 0 1990 Shading indicates NBER recession 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020 Source: Bureau of Labor Statistics and Moody's Economy.com. 5
Labor Force Participation Seasonally Adjusted 70 Percent 65 United States New York State New Jersey Feb Jan 60 New York City 55 1990 Shading indicates NBER recession 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020 Source: Bureau of Labor Statistics and Moody's Economy.com. 6
124 Index (Dec2007=100) Private-Sector Employment Seasonally Adjusted Index New York City 118 112 106 New York United States Feb New Jersey 100 94 Puerto Rico 88 82 2007 2008 2009 Shading indicates NBER recession Source: Bureau of Labor Statistics and Moody's Economy.com. 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 7
Private-Sector Employment Seasonally Adjusted Index 124 Index (Dec2007=100) 118 112 106 100 New York City Long Island United States Feb Orange-Rockland- Westchester 94 Fairfield 88 2007 2008 2009 Shading indicates NBER recession Source: Bureau of Labor Statistics and Moody's Economy.com. 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 8
NYC Securities Employment Seasonally Adjusted Levels 290 Thousands Shading indicates time between securities peak and trough Thousands 4,500 230 4,000 Total Employment Minus Securities (right axis) Securities Employment (left axis) Feb 170 3,500 110 3,000 50 2,500 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Source: Bureau of Labor Statistics, Moody's Economy.com, and FRBNY calculations. 9
NYC Tech and Securities Employment Thousands of Jobs 200 Thousands +14,000 150 Securities Employment Jan10 to Sep17 +65,000 100 Technology Employment 50 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Source: Bureau of Labor Statistics and Moody s Economy.com.; FRBNY Staff Calculations Technology Employment Computer manufacturing Electronic shopping Software publishing Data processing, hosting, etc. Internet/web search portals Computer systems design Scientific R&D services 10
Manhattan 2016 Employment Location Quotient Manhattan Specialization Employment Change, Location Quotient, and Sector Size Securities, Commodity Contracts, Investments Apparel Manufacturing Information Performing Arts Professional & Technical Services Museums, Zoos & Parks Educational Services Insurance Carriers Food Service and Drinking Miscellaneous Manufacturing Merchant Wholesalers Administrative & Support Ambulatory Health Services Non Store Retailers Nursing & Residential Care Facilities Bubble Size Represents Number of Employees in 2016-50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% Percent Change in Manhattan Employment: 2006-2016 Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages (QCEW). 15
Home Prices CoreLogic Home Price Index, Seasonally Adjusted 180 Index (Mar2006=100) 160 140 Kings 120 Manhattan 100 Queens Nassau Jan 80 Suffolk United States 60 2006 2007 2008 2009 Source: CoreLogic Home Price Index (including distressed sales). Shading indicates NBER recession 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 12
Home Prices CoreLogic Home Price Index, Seasonally Adjusted 160 Index (Mar2006=100) 140 120 Buffalo Upstate NY 100 Rochester Albany Jan 80 United States 60 2006 2007 2008 2009 Source: CoreLogic Home Price Index (including distressed sales). Shading indicates NBER recession 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 13
What Lies Ahead for Puerto Rico? Both territories were in precarious shape, economically & fiscally, prior to hurricanes Irma & Maria. Irma & Maria caused substantial damage and disruption: More than 1,000 lost lives, attributable to the storms, in Puerto Rico. Widespread damage to homes, businesses, infrastructure, agriculture. Puerto Rico s power outage has been the biggest, by far, in US history. To begin to gauge the likely economic effect, we look at: How severe have the measured job losses been thus far? How many people left following the storms? and how many will return? What can satellite imagery of nighttime lights tell us about the persistence and geographic breadth of the disruption? 14
Net Domestic Air Passengers to Puerto Rico 12-Month Rolling Sum 0-50,000-100,000 Sep. -150,000-200,000-250,000-300,000 For the full calendar year 2017, 275,000 more people flew out of than into Puerto Rico about 215,000 above trend. Jan-10 Jul-11 Jan-13 Jul-14 Jan-16 Jul-17 15 Oct. Nov. Dec.
Net Domestic Air Passengers to Puerto Rico 40,000 20,000 0 Net Passenger Flows by Month -20,000-16,951-40,000-60,000 2017 Monthly Flow Usual Monthly Flow -42,376-44,781-80,000-100,000-91,958 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 16
Nighttime Lights in Puerto Rico August October San Juan Culebra Vieques San Juan Culebra Vieques Aguadilla Arecibo Caguas Humacao Aguadilla Arecibo Caguas Humacao Mayaguez Mayaguez Ponce Ponce December January San Juan Culebra Vieques San Juan Culebra Vieques Aguadilla Arecibo Caguas Humacao Aguadilla Arecibo Caguas Humacao Mayaguez Mayaguez Ponce Ponce 17 Source: Earth Observation Group; NOAA National Geophysical Data Center. 17
Regional Recap New York City has been the leader in job growth in the region. Areas adjacent to NYC have also seen fairly strong growth. Fairfield County has lagged, while northern NJ has picked up. For the first time in decades, Wall Street has not contributed to NYC s boom; tech has picked up some of the slack. Housing markets have been fairly robust in New York City and parts of upstate New York. Puerto Rico appears to be on a slow road to recovery from hurricanes Irma & Maria. 18