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Regional Economic Press Briefing May 21, 2014 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. What Kinds of Jobs Have Been Created During the Recovery? Jaison R. Abel, Senior Economist Overview • Recent Economic Performance New York City remains on strong growth trajectory, some weakness in Northern NJ to start the year, and signs of firming in Puerto Rico • Status of the Jobs Recovery A growing number of places in the region have gained back the jobs lost during the Great Recession • Types of Jobs Lost and Gained Middle-skill jobs were hardest hit during the recession and have not come back During the recovery, job growth has been concentrated at the higher and lower ends of the skills distribution FEDERAL RESERVE BANK OF NEW YORK 2 Recent Economic Performance Regional Economic Activity Indexes of Coincident Economic Indicators 120 Index (December 2007 = 100) Apr 110 New York City 100 New York State New Jersey 90 Mar Puerto Rico 80 2007 Shading indicates NBER recession. 2008 2009 2010 2011 Last Briefing 2012 2013 Source: Federal Reserve Bank of New York; Government Development Bank for Puerto Rico. Note: The Puerto Rico composite index is based on a different methodology than the indexes produced by the FRBNY. 2014 4 Recent Job Growth Index of Total Employment, Seasonally Adjusted 108 Index (U.S. Employment Trough Feb 2010 = 100) Apr 106 Downstate NY 104 United States Northern New Jersey 102 Upstate NY 100 Puerto Rico 98 96 Jan10 Last Briefing Jul10 Jan11 Jul11 Jan12 Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com. Jul12 Jan13 Jul13 Jan14 5 Sectors Driving Regional Job Growth Change in Employment over Past Year (as of April 2014) 40,000 30,000 20,000 Downstate NY Health & Education Services Professional &Business Services Leisure & Hospitality 12,000 Upstate NY 9,000 6,000 10,000 3,000 0 0 Government -10,000 20,000 -3,000 Northern NJ 4,000 15,000 0 10,000 -4,000 5,000 -8,000 0 -12,000 -5,000 -16,000 Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com. Puerto Rico 6 Status of the Jobs Recovery Share of Lost Jobs Gained Back Local Total Employment Trough to April 2014 US = 99 percent Glens Falls Utica Rochester Syracuse Albany Buffalo Ithaca Elmira Binghamton Kingston Recovered All Lost Jobs FairPutnam field Recovered 3/4 of Lost Jobs Recovered Less Than 3/4 of Lost Jobs Newark No Recovery Edison Source: Bureau of Labor Statistics and Moody’s Economy.com. Note: Putnam and Bergen are the Putnam-Rockland-Westchester and Bergen-Hudson-Passaic Special BLS Areas. NYC Puerto Rico 8 Comparison to Previous Recessions Total Employment Indexed to Local Employment Peak 110 Index (Start of Downturn = 100) U.S. 105 Early 1990s Downturn 100 Apr Early 2000s Downturn Recent Downturn 95 Start of Local Recession 1st Year 2nd Year 3rd Year 4th Year 5th Year 6th Year 90 Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com. 9 Comparison to Previous Recessions Total Employment Indexed to Local Employment Peak 110 Index (Start of Downturn = 100) U.S. New York City 105 Early 1990s Downturn 100 95 90 110 Early 2000s Downturn 1st Year 2nd Year 3rd Year Recent Downturn 4th Year 5th Year 6th Year Upstate NY Northern New Jersey 105 100 95 90 Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com. 10 Types of Jobs Lost and Gained Grouping Occupations into Skill Categories Based on 2013 Median Wage, United States $120,000 Higher Skill $100,000 $80,000 Management Computer & Math Legal Engineering Business & Finance Healthcare Practitioner Sciences Middle Skill Lower Skill Education Arts & Entertainment Installation & Repair Social Services Construction 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. 12 Job Change During the Great Recession Percent Change, United States, 2007 to 2010 6% Higher Skill Middle Skill Lower Skill 3% 0% United States 1.0% -2.6% -3% -6% -9% -9.3% -12% Source: U.S. Bureau of Labor Statistics, Occupational Employment Statistics. 13 Job Change During the Great Recession Percent Change, Region, 2007 to 2010 6% Higher Skill 3% Middle Skill Lower Skill Upstate NY Northern NJ 0% Puerto Rico Downstate NY -3% -6% -9% -12% Source: U.S. Bureau of Labor Statistics, Occupational Employment Statistics. 14 Job Change During the Recovery Percent Change, United States, 2010 to 2013 12% Higher Skill Middle Skill Lower Skill 9% 7.8% 6% 6.0% 3% 1.9% 0% United States -3% -6% Source: U.S. Bureau of Labor Statistics, Occupational Employment Statistics. 15 Job Change During the Recovery Percent Change, Region, 2010 to 2013 12% Higher Skill 9% Middle Skill Lower Skill Downstate NY 6% 3% 0% Upstate NY Northern NJ Puerto Rico -3% -6% Source: U.S. Bureau of Labor Statistics, Occupational Employment Statistics. 16 A Shrinking Middle Share of Jobs by Skill Group, 2007 and 2013 100% 90% 20% 22% Higher Skill 22% 23% 20% 21% 22% 23% 52% 49% Middle Skill 50% 47% 54% 50% 52% 49% 28% 30% 27% 28% 26% 2007 2013 2007 2013 2007 16% 17% 60% 55% 27% 25% 27% 2013 2007 2013 80% 70% 60% 50% 40% 30% 20% 28% 29% 2007 2013 Lower Skill 10% 0% United States Downstate NY Upstate NY Source: U.S. Bureau of Labor Statistics, Occupational Employment Statistics. Northern NJ Puerto Rico 17 Summary • A growing number of places in the region have gained back the number of jobs lost during the Great Recession • However, the types of jobs in the region have changed Middle-skill jobs lost during the recession have not come back Higher- and lower-skill jobs have grown during the recovery • Job opportunities in the middle have continued to shrink FEDERAL RESERVE BANK OF NEW YORK 18 Appendix Unemployment Rates Seasonally Adjusted, Local Peak and April 2014 18% 16.9% 16% 14% 14.1% 12% 10% Peak 10.1% 10.0% 9.7% 8.9% 8% 7.9% Current 6% 6.3% 6.9% 6.7% 4% 2% 0% United States New York New York City Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com. New Jersey Puerto Rico 21