Briefing on the State of the State presented to the SCAA Schuyler Center for Analysis and Advocacy Rae D. Rosen Assistant Vice President Federal Reserve Bank of New York November 16, 2006
Key Points: Economic activity is expanding at a robust pace in New York City. Growth is slower in the New York suburbs, and slower still in upstate and western region. The budget surpluses have been used in a fiscally responsive manner in New York City. For fiscal 2006 which ended this June, The estimated $1.4 billion 2006 surplus in New York City had a record $6.1 billion dollar surplus. NYC closed the 2007 fiscal budget gap, paid-down future liabilities, establish significant reserves for disallowances related to federal programs and allocated money for a pay-as-you-go capital fund. With the third quarter results nearly complete for the securities industry, analysts estimate that the industry has already booked 75 percent of the profits earned in 2005. Profits in 2006 are expected to easily exceed the record $21.5 billion earned in 2005. The economic outlook for NYC remains positive reflecting the strength of its dominant industry and the payout period which is concentrated in the first few months of 2007. The prospects for upstate and western New York are more subdued. Trends in legal immigration could dim this outlook, particularly in NYC, which relies on immigration to replace domestic out-migration. However, the housing market has provided evidence that successfully challenged the US Census estimates for NYC. Populations flows are largely negative for upstate and western New York. 2
Indexes of Coincident Economic Indicators Index July 1992=100 165 New York 155 July 2006 1.8% 145 135 9/11 165 155 145 135 Index July 1992=100 165 New York City 155 July 2006 6.2% 145 135 9/11 165 155 145 135 125 125 125 125 115 115 115 115 105 105 95 96 97 98 99 00 01 02 03 04 05 06 Index July 1992=100 165 New Jersey 155 July 2006 0.4% 145 135 125 115 105 95 96 97 98 99 00 01 02 03 04 05 06 165 155 9/11 145 135 125 115 105 105 95 96 97 98 99 00 01 02 03 04 05 06 Note: Shading denotes state or local recession. Source: FRBNY. 105 3
Expansion Patterns Increase from CEI Trough to Peak for the First 36 months Index 120 New York State Index 120 New York City Dec. 1982 - Apr. 1989 115 Nov. 1965 - Oct. 1969 115 Oct. 1982 - Apr. 1989 Oct. 1971 - Apr. 1973 Jun.1976 - Feb.1980 Nov.1965 - Oct.1969 110 110 Aug. 1980 - Aug. 1981 Oct. 1992 - Dec. 2000 Sep. 1992 - Jan. 2001 105 105 June 2003 July 2006 Aug. 2003 - July 2006 Nov. 1976 - Dec. 1981 Feb. 1972 - Mar. 1973 100 0 4 8 12 16 20 24 28 32 36 40 100 0 4 8 12 16 20 24 28 32 36 40 Number of Months Number of Months 4 Source: FRBNY.
Percent 6 Private-Sector Job Growth: U.S. and Region Percent change from 12 months earlier Percent 6 4 US Hudson Valley 4 2 2 0 0-2 -4 New York City Aug '06 = 2.0% New York Aug '06 = 1.1% Hudson Valley Aug '06 = 1.1% NYS NYC -2-4 -6 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06-6 Source: Bureau of Labor Statistics, FRBNY calculations. 5
Second District Unemployment Rates 2003 2005 Sep-06 United States 6.0% 5.1% 4.6% New York 6.4% 5.0% 4.2% New York City 8.3% 5.8% 4.5% 6 Source: Bureau of Labor Statistics.
Growth in Service Jobs % change August 2006 / August 2005 U.S. NJ NYC Professional & Business 2.7 1.6 1.8 Security/Commodity Broker 2.2-0.8 2.7 Leisure and Hospitality 1.6 2.9 4.6 Arts, Entertainment and Recreation 0.4 3.4 4.9 Accomodation And Food 1.9 2.8 4.5 Eating and Drinking 2.4 3.9 3.8 Accommodations -0.6-0.1 7.8 Health and Social 2.4 3.0 2.1 Educational 1.4-0.1 3.7 All Services 1.3 1.1 1.8 Services as % of Total Employment 83.1 87.8 93.7 Source: Bureau of Labor Statistics, FRBNY Calculations. 7
Source: NYS and NJ Dept. of Labor; Calculations Federal Reserve Bank of New York. Private Sector Job Growth 2003Q1 to 2005Q1 Job Gains Job Losses New Jersey Net Job Growth New York City Net Job Growth Avg. Salary 24600 (0.8%) Avg. Salary 33900 (1.2%) Mgt. of Companies $128,000 3100 - - Financial Services - - $196,000 1500 Prof., Tech. amd Scientific $70,600 1900 $93,000 10,500 Construction $48,400 5800 - - Average Wage XFinancial $46,000 $54,700 Education $37,400 1300 $41,500 2650 Retail Trade - - $30,900 10000 Admin. Support $33,600 5600 $41,900 3000 Health, Soc. Srvcs. $39,000 15200 $39,500 15,900 Unclassfied $34,300 15900 $31,100 500 Arts, Entertainment $27,200 2100 $51,600 1150 Accomodations $18,600 8100 $24,500 10,100 Finance $112,700-600 - - Utilities $93,700-1900 $88,500-500 Information $76,500-7100 $107,500-5100 Whsl. Trade $66,400-400 $65,900-200 Mfg. $63,000-23600 $49,800-14100 Trans., Warehousing $41,600-3850 $41,100-2100 Retail Trade $27,000-1400 - - Mgt. of Companies - - $208,800-1700
Wages and Salaries Percent change from 4 quarters earlier Percent United States 2006 Q1 4.2% New York 2006 Q1 3.5% Percent 16 16 14 14 12 12 10 10 8 NYS 8 6 US 6 4 4 2 2 0 0-2 -2-4 -4-6 -6 1992 1994 1996 1998 2000 2002 2004 2006 Source: Bureau of Labor Statistics, FRBNY calculations. 9
Personal Income Tax Revenue Collections Year to Date 6000 Mil $ New York City Mil $ 30000 New York State 5000 4000 2006 2001 2005 2004 2003 2002 25000 20000 2006 2002 2001 2005 2004 3000 15000 2003 2000 10000 1000 July 2006 YTD 13.6% 5000 July 2006 YTD 11.5% 0 J F M A M J J A S O N D 0 J F M A M J J A S O N D 10 Source: New York City Department of Finance, Office of the New York State Comptroller.
Percent 19 17 15 13 11 9 7 5 3 1-1 -3-5 Home Prices Percent change from 4 quarters earlier United States 2006 Q2 10.1% New York 2006 Q2 9.9% NYS 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 US Percent 19 17 15 13 11 9 7 5 3 1-1 -3-5 Source: Office of Federal Housing Enterprise Oversight. 11
Percent of Residential Mortgage Loans with Installments 90 Days Past Due 1.4 1.2 1.0 0.8 0.6 0.4 0.2 Percent United States 2006 Q2 0.91% New York 2006 Q2 0.66% US NYS Percent 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 0.0 92Q2 94Q2 96Q2 98Q2 00Q2 02Q2 04Q2 06Q2 12 Source: Mortgage Bankers Association.
Percent of Residential Mortgage Loans in Foreclosure Started During the Quarter Percent United States 2006 Q2 0.43% New York 2006 Q2 0.34% 0.6 Percent 0.6 0.5 0.4 US 0.5 0.4 0.3 0.2 NYS 0.3 0.2 0.1 0.1 0.0 92Q1 93Q4 95Q3 97Q2 99Q1 00Q4 02Q3 04Q2 06Q1 0.0 13 Source: Mortgage Bankers Association.
Returns 400,000 New York City Migration Returns 400,000 375,000 375,000 350,000 New York City Out 350,000 325,000 300,000 New York City Out 325,000 300,000 275,000 250,000 225,000 New York City In New York City In 275,000 250,000 225,000 200,000 200,000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: Internal Revenue Service, Statistics of Income. 14
Returns 380,000 360,000 340,000 320,000 300,000 280,000 260,000 240,000 220,000 200,000 180,000 New York Migration New York In New York Out Returns 380,000 360,000 340,000 320,000 300,000 280,000 260,000 240,000 220,000 200,000 180,000 160,000 160,000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: Internal Revenue Service, Statistics of Income. 15
Net Domestic and International Migration April 2000 to July 2005 Net Domestic Net International Migration Migration Connecticut -34,273 75,991 New York -1,001,100 667,007 New York City -808,552 511,018 New Jersey -194,901 290,194 Westchester -47,704 37,751 16 Source: U.S. Bureau of the Census.
Appendix 17
160 Net International Immigration 000 s 000 s 4000 140 120 100 80 60 40 NY (Scale Left) NYC (Scale Left) NJ (Scale Left) US (Scale Right) 2001 2002 2003 2004 2005 3500 3000 2500 2000 1500 1000 Source: U.S. Bureau of the Census. 18
Consumer Price Index Percent change from 12 months earlier Percent 6 United States Aug '06 3.8% New York-Northern NJ Aug '06 4.7% Percent 6 5 New York-Northern NJ 5 4 4 3 3 2 1 United States 2 1 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 0 19 Source: Bureau of Labor Statistics, FRBNY calculations.
New Privately Owned Housing Units Authorized Top 20 CSA s/cbsa s: 2005 Atlanta CBSA New York CBSA Phoenix CBSA Houston CBSA Dallas CBSA Chicago CBSA Riverside CBSA Miami CBSA Las Vegas CBSA Orlando CBSA Washington DC CBSA Tampa CBSA Los Angeles CBSA Cape Coral CBSA Seattle CBSA Jacksonville CBSA Austin CBSA San Antonio CBSA Minneapolis CBSA Charlotte CBSA 38534 35873 35600 34005 32264 29330 25656 25090 22986 22226 22196 22146 45634 53170 51295 65602 62375 62217 59756 72223 Source: U.S. Bureau of Census.
Housing Units Authorized by Building Permits 1990 = 100 1990 = 100 600.0 600.0 550.0 550.0 500.0 NYC 500.0 450.0 450.0 400.0 400.0 350.0 350.0 300.0 300.0 250.0 200.0 Hudson Valley US 250.0 200.0 150.0 100.0 50.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 NYS 150.0 100.0 50.0 Note: Data for 2006 is seven months YTD annualized. Source: Bureau of Census, FRBNY calculations. 21