Overview of the Regional Economy Jason Bram, Research Officer Presentation to the Community Depository Institutions Advisory Council (CDIAC) October 13, 2017 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.
Recent Private-Sector Job Trends Year-Over-Year Percent Change as of August 2017 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. 1
Private-Sector Job Trends Percent Change From Previous Peak to August 2017 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. 2
Private-Sector Employment Seasonally Adjusted Index 120 Index (Dec2007=100) 116 112 108 104 New York City Sep 100 United States 96 92 New York Puerto Rico New Jersey 88 2007 2008 2009 Shading indicates NBER recession 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Bureau of Labor Statistics and Moody's Economy.com. 3
120 Index (Dec2007=100) Private-Sector Employment Seasonally Adjusted Index Aug 116 New York City 112 108 Long Island Sep 104 100 96 Orange-Rockland -Westchester Fairfield 92 88 2007 2008 2009 United States Shading indicates NBER recession 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Bureau of Labor Statistics and Moody's Economy.com. 4
Private-Sector Employment Seasonally Adjusted Index 120 Index (Dec2007=100) 116 112 108 Albany Sep 104 Upstate Aug 100 96 Glens Falls Utica-Rome 92 United States 88 2007 2008 2009 Shading indicates NBER recession 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Bureau of Labor Statistics and Moody's Economy.com. 5
Private-Sector Employment Seasonally Adjusted Index 120 Index (Dec2007=100) 116 112 108 United States Sep 104 Buffalo Rochester Aug 100 96 Syracuse 92 88 2007 2008 2009 Shading indicates NBER recession 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Bureau of Labor Statistics and Moody's Economy.com. 6
Current Economic Conditions FRBNY Business Surveys, Current Conditions 60 Diffusion Index 40 20 Empire State Manufacturing Survey Sep 0-20 Business Leaders Survey -40-60 2007 2008 2009 Shading indicates NBER recession 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Federal Reserve Bank of New York. 7
Future Economic Conditions FRBNY Business Surveys, Conditions Six Months Ahead 60 Diffusion Index Empire State Manufacturing Survey 40 20 Sep 0 Business Leaders Survey -20-40 -60 2007 2008 2009 Shading indicates NBER recession 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Federal Reserve Bank of New York. 8
NYC Securities Employment Seasonally Adjusted Levels 270 Thousands Shading indicates time between securities peak and trough Thousands 4,250 240 4,000 210 180 Total Employment Minus Securities (right axis) Securities Employment (left axis) Aug 3,750 3,500 150 3,250 120 3,000 90 2,750 60 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
Home Prices CoreLogic Home Price Index, Seasonally Adjusted 120 Index (Mar2006=100) 110 NYC Metro 100 Aug 90 Westchester Fairfield 80 70 United States Rockland Shading indicates NBER recession 60 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: CoreLogic Home Price Index (including distressed sales). 10
Home Prices CoreLogic Home Price Index, Seasonally Adjusted 160 Index (Mar2006=100) 140 Kings 120 Manhattan 100 Queens Nassau Aug 80 Suffolk 60 2006 2007 2008 2009 Shading indicates NBER recession United States 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: CoreLogic Home Price Index (including distressed sales). 11
Home Prices CoreLogic Home Price Index, Seasonally Adjusted 130 Index (Mar2006=100) 120 110 Buffalo Upstate NY 100 Rochester Albany Aug 90 80 70 United States Shading indicates NBER recession 60 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: CoreLogic Home Price Index (including distressed sales). 12
What Lies Ahead for Puerto Rico & the US Virgin Islands? Both Puerto Rico & US Virgin Islands were in precarious shape, economically & fiscally, prior to hurricanes Irma & Maria. To early to assess costs & fallout from these hurricanes unprecedented for PR but there are precedents elsewhere. USVI saw similar devastation from Hugo ( 89) and Marilyn ( 95). Employment fell sharply but rebounded within 6-12 months; tourism industries appear to have been hit hard, while construction got a boost. There do not appear to have been significant long-term effects on population or employment. New Orleans was devastated by Katrina (2005): population & employment are still well below pre-storm levels a decade later. 13
Thousands of Jobs (Seasonally Adj) 46 Total Employment US Virgin Islands: Before & After Hurricanes 45 44 43 42 41 40 Total (Hugo 1989) Total (Marilyn 1995) 39 38-12 -10-8 -6-4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 Months Before/After Hurricane Source: Bureau of Labor Statistics, Moody's Economy.com, and FRBNY staff calculations. 14
Thousands of Jobs (Seasonally Adj) 7.5 Accommodation & Food Service Employment US Virgin Islands: Before & After Hurricanes 7.0 6.5 6.0 5.5 5.0 4.5 Accom. & Food (Hugo 1989) Accom. & Food (Marilyn 1995) 4.0-12 -10-8 -6-4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 Months Before/After Hurricane Source: Bureau of Labor Statistics, Moody's Economy.com, and FRBNY staff calculations. 15
Thousands of Jobs (Seasonally Adj) 4.5 Construction Employment US Virgin Islands: Before & After Hurricanes 4.0 3.5 3.0 2.5 Construction (Hugo 1989) Construction (Marilyn 1995) 2.0 1.5 1.0-12 -10-8 -6-4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 Months Before/After Hurricane Source: Bureau of Labor Statistics, Moody's Economy.com, and FRBNY staff calculations. 16
Regional Recap NYC continues to lead the region in job growth, followed by Long Island. Housing markets in these areas have been strong. New Jersey has lagged, and Fairfield County has been weak both in terms of job growth and home prices. Job growth has slowed to a crawl across most of upstate NY, but housing markets have continued to strengthen. Manufacturers report brisk growth in business activity, while service firms indicate more subdued growth. The securities industry, which typically drives NYC s economy has remained flat throughout this rapid expansion. The Puerto Rico and the US Virgin Islands are expected to see steep job losses in October but the long-term outlook is unclear. 17