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Regional Economic Press Briefing June 27, 2013 The views expressed here are those of the presenters and do not necessarily represent the views of the Federal Reserve Bank of New York or the Federal Reserve System. Regional Economic Conditions Jason Bram, Senior Economist Overview • Regional economy on the rebound • New York City, Long Island on a solid growth trajectory New Jersey, Upstate New York, Fairfield County growing moderately Puerto Rico appears to be back in a downturn Update on sectors that have lagged State & local government job cuts continue in some but not all of the region New York City’s brisk recovery continues to get little help from Wall St. Construction & housing had weighed down recovery but are now reviving FEDERAL RESERVE BANK OF NEW YORK 2 Regional Economic Activity Index of Coincident Economic Indicators (CEI) 110 Index (December 2007 = 100) May 105 Nov05 Mar08 Apr08 New York City 100 Jan08 New York State 95 Oct09 Dec10 New Jersey Puerto Rico 90 Nov09 85 Jan07 Apr Shading indicates NBER recession Jul07 Jan08 Jul08 Jan09 Jul09 Jan10 Jul10 Jan11 Jul11 Jan12 Jul12 Source: Federal Reserve Bank of New York; Puerto Rico Government Development Bank Note: The Puerto Rico composite index is based on a different methodology than the indexes produced by the FRBNY. Jan13 Jul13 3 Job Change During Recession and Recovery Local Peak to Local Trough and Local Trough to May 2013 Local Recession -6.3% -6.5% -7.2% Local Recovery (Through May) United States -8,736,000 6,317,000 Northern NJ -193,600 92,400 Fairfield County -30,300 -3.5% -79,000 Upstate NY -3.9% -230,300 Downstate NY 3.3% 17,800 42,400 4.9% 4.5% 1.9% 362,100 Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com Note: Northern NJ includes the Edison and Newark metro divisions and the Bergen-Hudson-Passaic special BLS area. Downstate NY includes the Poughkeepsie and Kingston MSAs, the Putnam-Rockland-Westchester special BLS area, New York City, and Long Island. Upstate NY includes the Buffalo, Rochester, Albany, Syracuse, Binghamton, Ithaca, Elmira, and Glens Falls MSAs. 6.3% 4 Total Employment Seasonally Adjusted Index 106 Index (December 2007 = 100) Hurricane Sandy 104 102 New York City 100 Long Island May 98 Upstate NY United States 96 Fairfield 94 New Jersey 92 90 88 Jan07 Shading indicates NBER recession Jul07 Jan08 Jul08 Jan09 Jul09 Jan10 Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com Jul10 Jan11 Jul11 Jan12 Jul12 Jan13 Jul13 5 State & Local Government Employment Percent Change Over Past Two Years and Two Previous Years May2009-May2011 United States -2.5% May2011-May2013 -0.8% New York -2.2% -2.1% New Jersey -4.7% 2.0% Connecticut -3.6% -1.4% New York City -1.6% -0.4% Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com 6 New York City Securities Employment Seasonally Adjusted Levels 200 Thousands Thousands 3,820 195 3,780 190 3,740 185 3,700 Total Employment Minus Securities (right axis) 180 3,660 175 3,620 Securities Employment (left axis) 170 3,580 May 165 160 Jun09 3,540 3,500 Dec09 Jun10 Dec10 Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com Jun11 Dec11 Jun12 Dec12 Jun13 7 Construction Employment Seasonally Adjusted Index 105 Index (December 2007 = 100) Hurricane Sandy 100 95 New York State 90 85 New Jersey United States 80 May 75 Fairfield 70 65 Jan07 Shading indicates NBER recession Jul07 Jan08 Jul08 Jan09 Jul09 Jan10 Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com Jul10 Jan11 Jul11 Jan12 Jul12 Jan13 Jul13 8 Regional Home Price Trends CoreLogic Home Price Index, Seasonally Adjusted 110 Index (U.S. Peak of March 2006 = 100) Hurricane Sandy 105 100 95 90 New York State 85 NYC Metro 80 Apr Fairfield 75 New Jersey 70 65 United States Shading indicates NBER recession 60 Mar06 Sep06 Mar07 Sep07 Mar08 Sep08 Mar09 Sep09 Mar10 Sep10 Mar11 Sep11 Mar12 Sep12 Mar13 Source: CoreLogic Home Price Index (including distressed sales); Seasonally adjusted by FRBNY staff Note: ‘NYC Metro’ refers to the ‘New York-White Plains-Wayne NY-NJ Metro Division’. 9 Conclusion • Economic recovery has continued across the tri-state region • New York metro region snapped back quickly from Sandy • Drag from housing finally appears to be behind us FEDERAL RESERVE BANK OF NEW YORK 10 Are Recent College Graduates Finding Good Jobs? Richard Deitz, Assistant Vice President Overview • How bad is unemployment and underemployment for recent college graduates? • How have recent college graduates in our region fared? • Are recent college graduates in some majors having better outcomes than others? FEDERAL RESERVE BANK OF NEW YORK 12 How Bad is Unemployment and Underemployment for Recent College Graduates? U.S. Unemployment Rates 12-Month Moving Average 12% Unemployment Rate 10% 8% 6% Working Age Population Apr 2013 Recent Graduates 4% 2% 0% 1990 All College Graduates Shading indicates NBER recessions 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Source: U.S. Census Bureau and U.S. Bureau of Labor Statistics, Current Population Survey. Note: College graduates are those with a BA degree or higher; recent college graduates are those aged 22-27; figures exclude those currently enrolled in school. 14 U.S. Unemployment Rate by Age College Graduates 12% Unemployment Rate 10% 2009-11 8% 6% 2000 4% 2% 0% Age 22 Age 23 Age 24 Age 25 Age 26 Age 27 Age 28 Age 29 Age 30 Age 31 Source: U.S. Census Bureau, American Community Survey. Note: College graduates are those with a BA degree or higher; figures exclude those currently enrolled in school. Age 32 Age 33 Age 34 Age 35 15 College Graduate Underemployment • Classify jobs into two categories based on information from the Department of Labor: Bachelor’s degree required: • e.g., pharmacist, social worker, software developer Bachelor’s degree not required: • e.g., retail salesperson, food server, electrician, health care technician • Graduates working in these jobs are considered underemployed FEDERAL RESERVE BANK OF NEW YORK 16 U.S. Underemployment Rates 50% Underemployment Rate 45% Recent Graduates 40% All College Graduates 35% 2012 30% 25% 20% 1990 Annual Shading indicates NBER recessions 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Source: U.S. Census Bureau and U.S. Bureau of Labor Statistics, Current Population Survey, March Supplement; U.S. Department of Labor, O*NET. Note: College graduates are those with a BA degree or higher; recent college graduates are those aged 22-27; figures exclude those currently enrolled in school. 17 U.S. Underemployment Rate by Age College Graduates 60% Underemployment Rate 2009-11 50% 40% 2000 30% 20% 10% 0% Age 22 Age 23 Age 24 Age 25 Age 26 Age 27 Age 28 Age 29 Age 30 Age 31 Source: U.S. Census Bureau, American Community Survey; U.S. Department of Labor, O*NET. Note: College graduates are those with a BA degree or higher; figures exclude those currently enrolled in school. Age 32 Age 33 Age 34 Age 35 18 How Have Recent College Graduates in Our Region Fared? Regional Unemployment & Underemployment Recent College Graduates, Share of Labor Force, 2009-11 60% 52% 50% Total 54% 5% 6% Unemployment 54% 51% 7% 7% 40% 30% 46% 49% 44% 46% Upstate NY Downstate NY Northern NJ 20% 10% Underemployment 0% United States Source: U.S. Census Bureau, American Community Survey; U.S. Department of Labor, O*NET. Note: Recent college graduates are those with a BA degree or higher aged 22-27; figures exclude those currently enrolled in school. 20 Are Recent College Graduates in Some Majors Having Better Outcomes Than Others? Employment Outcomes by Major Recent College Graduates, Share of Labor Force, 2009-11 Engineering 75% 20% 5% Education 75% 22% 4% Health 75% 22% 3% Math & Computers 65% Architecture & Construction 29% 60% Sciences 32% 51% 43% 6% 8% 6% Social Sciences 45% 48% 7% Business 44% 50% 6% Liberal Arts 40% 52% 8% Communications 40% 54% 6% Technologies 38% 55% 6% Agriculture & Nat Resources 38% 57% 5% Leisure & Hospitality 33% % in Jobs Where BA Degree Required 63% % in Jobs Where BA Degree Not Required 4% Unemployment Rate Source: U.S. Census Bureau, American Community Survey; U.S. Department of Labor, O*NET. Note: Recent college graduates are those with a BA degree aged 22-27; figures exclude those currently enrolled in school and those with a graduate degree. 22 Average Annual Wages by Major Recent Graduates, Adjusted for Demographics, 2009-11 High School Diploma Only Associates Degree Only Engineering $55k Business $51k Math & Computers $51k Health $49k Technologies $48k Architecture & Construction $46k Social Sciences $44k Agriculture & Nat Resources $42k Leisure & Hospitality $42k Communications $41k Sciences $40k Liberal Arts $38k Education $0k $35k BA Degree Required BA Degree Not Required $10k $20k $30k $40k Source: U.S. Census Bureau, American Community Survey; U.S. Department of Labor, O*NET. Note: Estimated using data for those 27 and under; figures exclude part-time workers and those with a graduate degree. $50k $60k 23 Summary • Relatively high unemployment and underemployment is not unusual for recent college graduates as it takes time to transition into the labor market. • However, evidence suggests young college workers have been struggling more in recent years. • Majors that provide technical training and are geared toward growing parts of the economy have tended to fare better. • Regardless of major, those with college degrees still tend to have better labor market outcomes than those without. FEDERAL RESERVE BANK OF NEW YORK 24 Appendix Major Field Groupings Based on the American Community Survey Agriculture and Natural Resources Agriculture Environment and Natural Resources Architecture and Construction Architecture Construction Services Business Business Communications Communications Education Education Administration and Teaching Engineering Engineering Health Medical and Health Sciences and Services Source: U.S. Census Bureau, American Community Survey. Leisure and Hospitality Cosmetology Services and Culinary Arts Physical Fitness, Parks, Recreation, and Leisure Liberal Arts Area, Ethnic, and Civilization Studies English Language, Literature, and Composition Fine Arts History Liberal Arts and Humanities Library Science Linguistics and Foreign Languages Philosophy and Religious Studies Theology and Religious Vocations Math and Computer Sciences Computer and Information Sciences Mathematics and Statistics Sciences Biology and Life Sciences Physical Sciences Social Sciences Criminal Justice and Fire Protection Family and Consumer Sciences Law Psychology Public Affairs, Policy, and Social Work Social Sciences Technologies Communication Technologies Electrical and Mechanic Repairs and Technologies Engineering Technologies Nuclear, Industrial Radiology, and Biological Technologies Transportation Sciences and Technologies 26 Total Employment Seasonally Adjusted Index 106 Index (December 2007 = 100) Hurricane Sandy 104 102 New York City 100 New York State 98 May United States 96 94 New Jersey 92 Puerto Rico 90 88 Jan07 Shading indicates NBER recession Jul07 Jan08 Jul08 Jan09 Jul09 Jan10 Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com Jul10 Jan11 Jul11 Jan12 Jul12 Jan13 Jul13 27 New York City Securities Employment Seasonally Adjusted Levels 240 210 Thousands Thousands Shading indicates time between securities and total employment troughs Total Employment Minus Securities (right axis) 4,000 3,750 180 3,500 May 150 3,250 Securities Employment (left axis) 120 3,000 90 2,750 60 1966 2,500 1971 1976 1981 1986 Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com 1991 1996 2001 2006 2011 28