Regional Economic Press Briefing• During Q2- 2011, activity expanded in New York State and New...

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 Press Briefing

August 12, 2011

Regional Economic UpdateJaison R. Abel, Senior Economist

Overview for the RegionI. Overall Economic Activity

• During Q2-2011, activity expanded in New York State and New York City, held steady in New Jersey, and declined slightlyin Puerto Rico

II. Employment• Job growth was generally stronger than in the nation, although

unemployment rates edged up

III. Housing and Household Finances• Housing markets remain weak, but have started to firm

• Pockets of household financial stress clearly remain

3

Regional Economic ActivityIndex of Coincident Economic Indicators (CEI)

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. 4

86

88

90

92

94

96

98

100

102

104

Jan07 Jul07 Jan08 Jul08 Jan09 Jul09 Jan10 Jul10 Jan11 Jul11

New York State

New Jersey

New York City

Puerto Rico

Nov05

Apr08Apr08

Index (December 2007 = 100)

Shading indicates NBER recession

Last Briefing

Nov09

Oct09

Mar-Jun PercentChange

Jun

May

Mar +0.8%

+0.1%+0.9%

-0.5%

Jan08

Regional Employment TrendsSeasonally Adjusted

Source: Bureau of Labor Statistics and Moody’s Economy.com 5

88

90

92

94

96

98

100

102


United States

New York State

New Jersey

New York City

Puerto Rico



Last Briefing

-0.2%

+0.4%

+0.4%

+0.6%

Jul


Jun

+0.2%

Private and Public-Sector EmploymentSeasonally Adjusted, Percent Change, March to June 2011


0.4%

0.7%

0.1%

0.7%

-0.3%-0.5%

-0.8%

-2.0%

-0.7%

2.6%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

United States

New York State

New York City

NewJersey

Puerto Rico

Private-Sector EmploymentPublic-Sector Employment

Employment Change Within the RegionSeasonally Adjusted, Percent Change, March to June 2011

7

Source: Bureau of Labor Statistics and Moody’s Economy.comNote: Putnam and Bergen are the Putnam-Rockland-Westchester and Bergen-Hudson-Passaic Special BLS Areas.

-1.0% to 0.0%0.0% to 0.2%0.2% to 3.0%

U.S. = 0.2%Newark

GlensFalls

Elmira Binghamton

Putnam Fairfield

Edison

Kingston

Buffalo

Rochester SyracuseUtica

Albany

Ithaca

NYC

PuertoRico

Regional Unemployment RatesSeasonally Adjusted Rates


0%

2%

4%

6%

8%

10%

12%

14%

16%

18%


UnitedStates

New York State

NewJersey

New YorkCity

Puerto Rico

Last BriefingShading indicates

NBER recession

14.9%

8.0%

9.5%9.1% Jul

8.7%

Jun

Regional Home Price TrendsCoreLogic Home Price Index, Seasonally Adjusted

9

60

65

70

75

80

85

90

95

100

105

110

Mar06 Sep06 Mar07 Sep07 Mar08 Sep08 Mar09 Sep09 Mar10 Sep10 Mar11

U.S.

NewJersey

New York State

NYC Metro

Index (U.S. Peak of March 2006 = 100)


Jun

Feb09 Jun10 Mar11

+2.0%

+1.6%

+1.5%

-1.1%


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.’

Regional Delinquency RatesPercent of Total Debt Balance 90+ Days Late

Source: FRBNY Consumer Credit Panel/Equifax 10

0%

2%

4%

6%

8%

10%

12%

Mar06 Sep06 Mar07 Sep07 Mar08 Sep08 Mar09 Sep09 Mar10 Sep10 Mar11 Sep11

New Jersey

New YorkState

U.S. Average

PuertoRico

Q2


11

Delinquency Rates Within the RegionPercent of Total Debt Balance 90+ Days Late in Q2-2011

Source: FRBNY Consumer Credit Panel/Equifax

2.9% to 4.5%4.5% to 7.3%7.3% to 10.0%

U.S. = 7.3%

10.0% to 16.3%

Newark

GlensFalls

Elmira Binghamton

Putnam Fairfield

Edison

Kingston

Buffalo


Albany

Ithaca

New YorkCity

The recovery continued at a slow pace during Q2-2011:

• Economic activity expanded or held steady

• Employment growth, while sluggish, generally outpaced the nation, although the public sector remains weak and unemployment rates remain high

• Regional housing markets appear to be firming,but remain fragile

• Pockets of household financial stress clearly remain, with especially high delinquency rates in and aroundNew York City

Summary of Regional Conditions

12

Job Creation in the RegionErica L. Groshen, Vice President

Agenda• Churning

• Despite slow overall growth, some industries expand while others contract

• Jobs created • Mix of old jobs and new jobs, by industry

• Old jobs • Hiring that restores firms, puts people back to work more easily

• New jobs• Hiring that transforms our region, changing the industrial mix• May entail skill upgrading

14

Bottom Line on Job Creation in the Region

• Recent job creation is closely balanced between• Industries restoring jobs lost during the recession

• Industries creating new jobs that transform the economy

• Due to the depth of the recession, both types of job churning are more pronounced than in recent downturns• Metro areas’ experience varies

• New jobs tend to be in highly educated sectors

15

Regional Employment TrendsSeasonally Adjusted

Source: Bureau of Labor Statistics and Moody’s Economy.com

88

90

92

94

96

98

100

102


United States

New York State

New Jersey

Puerto Rico


Jul

Jun

Recession Recovery

16


Certain Jobs Are Growing: United StatesEmployment Change (Thousands), June 2009-June 2011

Source: Bureau of Labor Statistics, Haver Analytics, and Moody’s Economy.com

-750 -500 -250 0 250 500 750

State & Local GovtConstructionNondurable Goods ManufacturingInformation Services Finance & Insurance ServicesReal Estate, Rental & LeasingWholesale Trade Utilities

Retail TradeArts, Entertainment & Recreation Services

Federal Government Management of Companies & Enterprises

Transportation & Warehousing Other Services

Educational ServicesDurable Goods Manufacturing

MiningAccommodation & Food Services

Professional & Technical ServicesAdministrative Support

Health Care & Social Assistance

Gains in growing industries: 1.9 m (+1.5%)

Losses in shrinking industries:1.4 m (-1.1%)

Net change in jobs: +0.5 m (+0.4%)

17

New Jobs and Old Jobs

Medical Technician Autoworker

Laid off

Old JobNew Job

Retraining Needed No Retraining Needed

Autoworker

18

Why Distinguish BetweenOld and New Jobs

• “Old job” churning reflects activity paused and restored

• “New job” churning transforms an area’s economy

• Compared with restoring old jobs, new job creation offers• Challenges

– Effort to establish positions and hire workers– Retraining may be needed– Risk and stress for workers, firms, and communities

• Opportunities– Make region more competitive, set stage for more growth – Adjust to changing technology, trade and consumption patterns

19

Source: Bureau of Labor Statistics, Haver Analytics, and author’s calculations

-20

-15

-10

-5

0

5

10

15

20

-20 -15 -10 -5 0 5 10 15 20

Construction

AdminSupport

Health Care& Social

LocalGov

New Job GrowthOld Jobs Rebounding

Against the TideDisappearing Jobs

Percent Employment Change During Recession

Perc

ent E

mpl

oym

ent C

hang

e D

urin

g R

ecov

ery

Total Decline During

Recession

Total Growth During

Recovery

Churning Among Industries: New York StateChange During Recession and Recovery to Date

20

Churning Among Industries: New York StateChange During Recession and Recovery to Date

-20

-15

-10

-5

0

5

10

15

20

-20 -15 -10 -5 0 5 10 15 20

Construction

TransportInformation

Finance

Management

Education

RetailTrade

Professional& Scientific

AdminSupport

WholesaleTrade

Accommodation& Food

Health Care& SocialOther

SrvcsArts & Entertainment

LocalGov

FederalGov

StateGov

NaturalResources

NondurableManufacturingDurable

Manufacturing

Real Estate




Perc

ent E

mpl

oym

ent C

hang

e D

urin

g R

ecov

ery


Recession

Total Growth During

Recovery

21Source: Bureau of Labor Statistics, Haver Analytics, and author’s calculations

Churning Among Industries: New JerseyChange During Recession and Recovery to Date

-20

-15

-10

-5

0

5

10

15

20

-20 -15 -10 -5 0 5 10 15 20

Construction

Transport

Information

Finance

Management

Education

RetailTrade

Professional& Scientific

AdminSupport

Wholesale Trade

Accommodation& Food

Health Care& Social

Arts & Entertainment

LocalGov

FederalGov

StateGov

NondurableManufacturing

DurableManufacturing

RealEstate

OtherSrvcs




Perc

ent E

mpl

oym

ent C

hang

e D

urin

g R

ecov

ery


Recession

Total Growth During

Recovery

22Source: Bureau of Labor Statistics, Haver Analytics, and author’s calculations

Churning Index Summarizes the Pattern• Adds up all industry employment changes during

recession and recovery• Old Job churning index: losses → rebounds

• New Job churning index: shrinking → growing industries

• Total churning index: Old Job churning + New Job churning

• Scale = share of total employment affected• Rises with depth of recession and/or amount of transformation

• 0% = no change

• 20% = turmoil, many jobs move

23

Old and New Job Churning in the Region During Recession and Recovery

Note: Puerto Rico data taken from June 2005 to June 2010 (recession) and June 2010 to June 2011 (recovery).

0

2

4

6

8

10

12

14

1990 2007 1990 2007 1990 2007 1990 2005

Percent of Employment (Churning Index)

Puerto RicoNew JerseyNew York StateUnited States

51%

49%

38%

62%

78%

22%

45%

55%68%

32%

53%

47%

45%

55%

53%

47%

Old Jobs

New Jobs

Source: Bureau of Labor Statistics, Haver Analytics, and author’s calculations

Note: 2007 & 1990 refer to year recession started.

24

Old Versus New Job ChurningRelative Shares


Newark

GlensFalls

Elmira Binghamton

Putnam Fairfield

Edison

Kingston

Buffalo


Albany

Ithaca

NYC

Balanced Old and New Jobs

Churning Index

Mostly New Jobs

Mostly Old Jobs

25

Which Types of Jobs Are Being Created and Destroyed?

National Long-Term Trends

• New jobs• Use creativity, innovativeness, complex thought, education• Require personal contact, ability to communicate

• Disappearing jobs• Routine, easily automated• Tradable, easily defined and moved

26

New or Disappearing JobsNew York and New Jersey

Education

Health Care & Social Services

High

Accommodation & Food Services Low

High

New Job Industries Percent College Graduates

Manufacturing - Durables

Construction

Low

Manufacturing - Nondurable Low

Low

Disappearing Jobs Percent College Graduates

27

Evidence of Upskilling from New JobsPercent of Workers With College Degree

Source: U.S. Census Bureau and author’s calculations

30%

32%

34%

36%

38%

40%

42%

United States New York State New Jersey

Impact of New Job ChurningPercent of Workers with College Degree in 2007

0.5%

0.3%

0.3%

28

Summary• Recovery is far from complete

• To date, job creation has been closely balanced between old and new jobs in the nation and the region• Compared to recent downturns, most additional churning from

this deep recession is old job (not transformational) churning• Regional metro areas vary considerably in experience

• Old jobs put people back to work more easily

• New jobs help transform the region and make it more competitive• Some workers may require retraining• Recent churning implies upskilling for the region as new jobs

tend to be in high-skill sectors

29

30Question & Answer

Appendix

Employment Growth by SectorSeasonally Adjusted, Percent Change, March to June 2011


Transportation & UtilitiesProfessional & Business Services

Retail TradeConstruction & Mining

ManufacturingWholesale Trade

Education & Health Services

Other ServicesInformation

Financial ActivitiesState & Local Government

Federal Government

Leisure & Hospitality

U.S.

0.7%0.5%0.5%0.5%0.4%0.4%0.4%

0.2%0.0%

-0.1%-0.4%-0.8%

0.3%

NewYork

1.3%1.3%0.5%3.2%0.9%1.6%0.3%

1.1%-0.7%0.2%

-0.8%-1.2%

0.0%

NewJersey

1.3%0.3%1.0%1.5%

-1.3%1.1%0.9%

0.6%-1.0%-0.7%-0.7%-1.4%

2.6%

PuertoRico

5.8%-2.7%1.5%

-0.7%-2.9%0.1%2.7%

-0.1%2.1%

-0.2%1.9%

-4.0%

-1.0%

NewYorkCity0.7%1.6%

-1.2%-0.5%-2.5%1.8%0.6%

-2.0%-2.3%-0.6%-1.4%-7.2%

0.9%

Unemployment Rates Within the RegionSeasonally Adjusted, June 2011


9.29.1 Jul

5.7

7.1 7.47.8 7.8 8.1

7.0 7.1

8.4 8.7 8.89.3

9.7

0%

2%

4%

6%

8%

10%

12%

U.S.

Ithaca

AlbanyRochester

Buffalo Syracuse

Binghamton Edison

Lower Hudson

Fairfield

Passaic BergenHudson

City New York

Island Long

Newark

Labor ForceSeasonally Adjusted, Percent Change, March to June 2011


0.0%

-0.3%

-0.2%

0.1%

0.6%

-0.4%

-0.3%

-0.2%

-0.1%

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

0.6%

0.7%

United States

New YorkState

NewJersey

New York City

Puerto Rico

Home Prices Within the RegionCoreLogic Home Price Index, Seasonally Adjusted, March to June 2011

35

-1.1

0.0

-0.6

-1.1

1.6

0.5

-0.3 -0.3

3.2

0.6

-0.7

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

U.S.

Ithaca

Syracuse

Binghamton

Fairfield

Poughkeepsie

Buffalo

Albany

Rochester Island Long

MetroNYC

2.3

1.4

0.9

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,’ ‘Newark Metro’ refers to the ‘Newark-Union NJ-PA Metro Division, and ‘Edison Metro’ refers to the Edison-New Brunswick NJ Metro Division.’

Bergen County

MetroNewark

Metro Edison

Certain Jobs Are Growing: New YorkEmployment Change (Thousands), June 2009-June 2011

-40 -30 -20 -10 0 10 20 30 40

State & Local Gov'tConstructionMfg Durable GoodsMfg Nondurable GoodsFederal GovernmentInformationTransport/Warehousing/UtilitiesReal Estate/Rental & LeasingArts, Entertainment/RecreationMining & Logging

Finance & InsuranceMgmt of Companies/Enterprises

Wholesale TradeOther Services

Retail TradeProf, Scientific & Tech Svces

Administrative SupportEducational Services

Accommodation & Food SvcsHealth Care & Social Assistance

Net change in jobs: +96,000 (+1.1%)

Gains in growing industries: +182,000 (+2.1%)

Losses in shrinking industries:-86,000 (-1.0%)

36Source: Bureau of Labor Statistics, Haver Analytics, and Moody’s Economy.com

Certain Jobs Are Growing: New JerseyEmployment Change (Thousands), June 2009-June 2011

-40 -30 -20 -10 0 10 20 30 40

State & Local GovtMfg Nondurable GoodsConstructionMfg Durable GoodsInformation, New JerseyWholesale TradeFederal GovernmentOther ServicesReal Estate/Rental & LeasingMgmt of Companies/EnterprisesArts, Entertainment/RecreationTransport/Warehousing/UtilitiesMining & Logging

Educational ServicesFinance & Insurance

Prof, Scientific & Tech SvcesAdministrative Support

Retail TradeAccommodation & Food Svcs

Health Care & Social Assistance

Gains in growing industries: 45,000 (+1.2%)

Losses in shrinking industries:79,000 (-2.0%)

Net change in jobs: -33,000 (-0.8%)


Certain Jobs Are Growing: Puerto RicoEmployment Change (Thousands), June 2010-June 2011


-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6

Logging,Mining & ConstructionFederal GovernmentMfg Nondurable GoodsLeisure & HospitalityMfg Durable GoodsWholesale TradeProf, Scientific & Tech SvcesRetail TradeFinance & InsuranceEducational ServicesReal Estate/Rental & LeasingOther Services

Transport/Warehousing/UtilitiesInformation

Administrative SupportState and Local Government

Health Care & Social AssistanceInformation

Gains in growing industries: +12,100 (+1.2%)

Losses in shrinking industries:-20,200 (-2.1%)

Net change in jobs: -8,100 (-0.8%)

Churning Among Industries: Puerto RicoJune 2005 to June 2009 (Recession) and 24-Month Recovery

-40

-30

-20

-10

0

10

20

30

40

-40 -30 -20 -10 0 10 20 30 40

TransportInformation

Finance

EducationRetailTrade

AdminSupport

Wholesale Trade

Health Care& SocialLeisure

LocalGov

FederalGov

StateGov

NaturalResources

NondurableManufacturing

DurableManufacturing

OtherSrvcs

Real Estate Professional & Scientific




Perc

ent E

mpl

oym

ent C

hang

e D

urin

g R

ecov

ery


Recession

Total Growth During

Recovery

Source: Bureau of Labor Statistics, Haver Analytics, and author’s calculations 39

“New Job” ChurningFrom Shrinking Industries to Growing Industries


Newark

GlensFalls

Elmira Binghamton

Putnam Fairfield

Edison

Kingston

Buffalo


Albany

Ithaca

NYC

PuertoRico

2.6 to 3.2

3.2 to 3.7

3.7 to 7.5

NY

PR

U.S. = 3.6

NJ

Churning Index

40

“Old Job” ChurningLost During Recession, Then Regained During Recovery or Vice Versa


Newark

GlensFalls

Elmira Binghamton

Putnam Fairfield

Edison

Kingston

Buffalo


Albany

Ithaca

NYC

PuertoRico

2.1 to 2.5

2.5 to 3.0

3.0 to 7.0

NY

NJ & PR

U.S. = 3.4Churning Index

41

Old and New Job Churning in Regional MetrosDuring Recession and Recovery

0

1

2

3

4

5

6

7

8

9

Old Jobs

New Jobs

BuffaloSyracuse

Poughkeepsie

Fairfield

BinghamtonIthaca

Edison

Rochester AlbanyNYC

Newark

Percent of Employment (Churning Index)

Long Island

57%

43% 55%

62% 50%

56% 54%

57% 53% 62%

50% 61%

50%

38% 38%

47% 46%

46%

54% 54%

44%

50%

38% 45%

39%

43%

46%

62%

Elmira

60%

40%

Bergen HudsonPassaic

WestchesterPutnam

Rockland

Source: Bureau of Labor Statistics, Moody’s Economy.com, and author’s calculations 42

Regional Economic Press Briefing• During Q2- 2011, activity expanded in New York State and New...

Documents

Transcript of Regional Economic Press Briefing• During Q2- 2011, activity expanded in New York State and New...