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Job Growth in the Region Economic Press Briefing: August 18, 2016 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. The 2nd Federal Reserve District Regions in the District Upstate Puerto Rico & Northern NJ U.S. Virgin Islands Downstate FEDERAL RESERVE BANK OF NEW YORK 1 Overview • • • The regional economy has continued to grow slowly over the past year, with many parts of the District seeing job gains. New York City remains on a strong growth trajectory, while job growth in upstate NY and northern NJ has been slower. Puerto Rico continues to lose jobs. Middle-wage jobs have finally started to return, though to different degrees across the region. FEDERAL RESERVE BANK OF NEW YORK 2 Recent Economic Performance Regional Employment Trends Indexes of Total Employment, Seasonally Adjusted 112 Index (Dec2007=100) Jun +1.7% 106 Y-O-Y +1.8% Jul Downstate NY +0.4% 100 Upstate NY +1.4% United States Northern NJ 94 Puerto Rico 88 -2.2% 82 2007 Shading indicates NBER recession 2008 2009 2010 2011 2012 2013 2014 Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com; data are early benchmarked by FRBNY staff. 2015 2016 4 Sectors Driving Regional Job Growth Net Change in Employment, Thousands, 2013-2016 (YTD) Downstate NY 150 Upstate NY 50 Health & Education Services 120 129 40 Professional & Business Services 88 Leisure & Hospitality 90 70 60 20 Construction 44 30 30 Government 10 14 8 5 0 0 -30 -10 4 -9 Northern NJ 75 -9 Puerto Rico 5 4 60 0 45 -5 30 -10 -2 -3 -9 28 15 22 -15 18 13 0 4 -15 Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com. -20 -20 -25 5 Recent Growth in and around New York City 2015 Private-Sector Job Growth Strong Moderate Modest Little or None Declining Ulster Dutchess Putnam Orange Fairfield Westchester Sussex Rockland Passaic Bergen Warren Morris Bronx Suffolk Essex Queens Union Nassau Kings Hunterdon Somerset Middlesex Monmouth Source: U.S. Bureau of Labor Statistics (QCEW) and Moody’s Economy.com. 6 New York City’s New Growth Sector Number of Jobs 200 Thousands +12,000 2010 to 2015 Securities Employment 150 +53,000 100 Technology Employment Technology Employment • Computer manufacturing • Electronic shopping • Software publishing • Data processing, hosting • Internet/web search portals • Computer systems design • Scientific R&D services 50 0 1990 Shading indicates NBER recession 1992 1994 1996 1998 2000 2002 Source: U.S. Bureau of Labor Statistics (QCEW) and Moody’s Economy.com. 2004 2006 2008 2010 2012 2014 2016 7 Recent Growth in Upstate NY 2015 Private-Sector Job Growth Strong Moderate Modest Little or None Declining North Country Watertown Glens Falls Utica Syracuse Rochester Buffalo Albany Ithaca Elmira Source: U.S. Bureau of Labor Statistics (QCEW) and Moody’s Economy.com. Binghamton 8 Upstate Manufacturing Employment Indexes of Manufacturing Employment, Seasonally Adjusted 120 Index (Jan1990=100) 100 80 Albany Buffalo 60 Syracuse Rochester 40 Binghamton 20 0 1990 Shading indicates NBER recessions 1992 1994 1996 1998 2000 2002 Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com. 2004 2006 2008 2010 2012 2014 2016 9 The Return of Middle-Wage Jobs Job Categories Based on 2015 Median Wages, United States $120,000 Higher Wage $100,000 $80,000 Middle Wage Lower Wage 20% 50% 30% Management Computer & Math Legal Engineering Business & Finance Healthcare Practitioners Sciences Education Arts & Entertainment Installation & Repair Construction Social Services Protective Services Administrative Support Production Transportation Healthcare Support Sales Building Maintenance Personal Care Farming Food Preparation $60,000 $40,000 $20,000 $0 Source: U.S. Bureau of Labor Statistics (Occupational Employment Statistics). 11 Job Gains in the United States Net Change in Total Employment, Thousands 2,500 2,000 2010 to 2013 2013 to 2015 2,261 2,184 2,104 1,500 1,577 1,470 1,205 1,000 500 0 Higher Wage Middle Wage Lower Wage Source: U.S. Bureau of Labor Statistics (Occupational Employment Statistics). Higher Wage Middle Wage Lower Wage 12 Middle-Wage Jobs Returning in the U.S. • • • Growth in traditional blue collar jobs: Construction [+400,000] Production [+300,000] Transportation [+500,000] Installation & Repair [+250,000] Education jobs growing again as local government fiscal pressures have subsided. [+150,000] Rebound in Administrative Support jobs. [+400,000] FEDERAL RESERVE BANK OF NEW YORK 13 Job Gains and Losses in the Region Net Change in Total Employment, Thousands 180 Downstate NY: 2010-2013 179 144 90 0 Downstate NY: 2013-2015 157 130 102 18 Higher Middle Lower Higher Middle Lower -90 90 New Jersey: 2010-2013 New Jersey: 2013-2015 45 27 0 Higher 35 7 17 Middle Lower Higher 23 27 Middle Lower -45 Source: U.S. Bureau of Labor Statistics (Occupational Employment Statistics). 14 Job Gains and Losses in the Region Net Change in Total Employment, Thousands 60 Upstate NY: 2010-2013 Upstate NY: 2013-2015 30 22 15 0 Middle Higher Lower 12 5 Higher Middle 19 Lower -25 -30 20 Puerto Rico: 2010-2013 Puerto Rico: 2013-2015 14 2 0 Middle Higher 4 Lower Middle Higher Lower -2 -20 -29 -39 -40 Source: U.S. Bureau of Labor Statistics (Occupational Employment Statistics). 15 Middle-Wage Job Gains Weak in Some Areas Upstate NY Limited bounce back in Education and Construction jobs coupled with ongoing declines in Administrative Support and Production jobs. New Jersey Steep losses in Administrative Support and Production jobs. Puerto Rico Broad-based declines in middle-wage jobs, with large job losses tied to the island’s weak public sector (Education, Protection) along with an acceleration in Construction job losses. FEDERAL RESERVE BANK OF NEW YORK 16 Summary • • • New York City continues to be an engine of growth in the region, with a burgeoning tech sector and widespread gains in middle-wage jobs. Growth has been slower in upstate NY and northern NJ, where middle-wage jobs have not bounced back as much. Puerto Rico continues to struggle under the weight of economic stagnation, a fiscal crisis, and out-migration. FEDERAL RESERVE BANK OF NEW YORK 17 Appendix Recent Job Growth in the District Percent Change in Total Employment, 2015Q2 to 2016Q2 3% NYC 2% 2.1% Lower Hudson Valley 1.5% 1% Long Island Fairfield 0.7% United States Northern NJ 0.7% 1.4% Buffalo Rochester 0.9% Albany Syracuse 0.5% 0.4% 0.1% 0% -0.1% Binghamton -1% -2% -1.0% Utica -2.2% Puerto Rico -3% Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com; data are early benchmarked by FRBNY staff. 19