Regional Economic Conditions

Regional Economic Press Briefing

June 27, 2013 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 Conditions Jason Bram, Senior Economist

Overview

• Regional economy on the rebound New York City, Long Island on a solid growth trajectory New Jersey, Upstate New York, Fairfield County growing moderately Puerto Rico appears to be back in a downturn

• Update on sectors that have lagged State & local government job cuts continue in some but not all of the region New York City’s brisk recovery continues to get little help from Wall St. Construction & housing had weighed down recovery but are now reviving

FEDERAL RESERVE BANK OF NEW YORK 2

Regional Economic Activity Index 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. 3

85

90

95

100

105

110

Jan07 Jul07 Jan08 Jul08 Jan09 Jul09 Jan10 Jul10 Jan11 Jul11 Jan12 Jul12 Jan13 Jul13

New York State

New Jersey

New York City

Puerto Rico

May

Nov09

Oct09 Dec10

Nov05

Jan08

Apr08 Mar08

Apr Shading indicates NBER recession

Index (December 2007 = 100)

Job Change During Recession and Recovery Local Peak to Local Trough and Local Trough to May 2013

Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com Note: Northern NJ includes the Edison and Newark metro divisions and the Bergen-Hudson-Passaic special BLS area. Downstate NY includes the Poughkeepsie and Kingston MSAs, the Putnam-Rockland-Westchester special BLS area, New York City, and Long Island. Upstate NY includes the Buffalo, Rochester, Albany, Syracuse, Binghamton, Ithaca, Elmira, and Glens Falls MSAs. 4

Downstate NY

Upstate NY

Fairfield County

Northern NJ

United States

-3.9%

-3.5%

-7.2%

-6.5%

-6.3%

6.3%

1.9%

4.5%

3.3%

4.9%

-230,300

-79,000

-30,300

-193,600

-8,736,000

362,100

42,400

17,800

92,400

6,317,000

Local Recovery (Through May) Local Recession

Hurricane Sandy

Total Employment Seasonally Adjusted Index

5

88

90

92

94

96

98

100

102

104

106


United States

New York City

May


Shading indicates NBER recession

Long Island

Upstate NY Fairfield

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

New Jersey

State & Local Government Employment Percent Change Over Past Two Years and Two Previous Years

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

-0.4%

-1.4%

2.0%

-2.1%

-0.8%

-1.6%

-3.6%

-4.7%

-2.2%

-2.5%

New York City

Connecticut

New Jersey

New York

United States May2009-May2011

May2011-May2013

New York City Securities Employment Seasonally Adjusted Levels

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

3,500

3,540

3,580

3,620

3,660

3,700

3,740

3,780

3,820

160

165

170

175

180

185

190

195

200

Jun09 Dec09 Jun10 Dec10 Jun11 Dec11 Jun12 Dec12 Jun13

Securities Employment

(left axis)

Total Employment Minus Securities

(right axis)

May

Thousands Thousands

Hurricane Sandy

Construction Employment Seasonally Adjusted Index

8

65

70

75

80

85

90

95

100

105


United States

New Jersey

New York State

Fairfield

May




Hurricane Sandy

Regional Home Price Trends CoreLogic Home Price Index, Seasonally Adjusted

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’.

9

60

65

70

75

80

85

90

95

100

105

110

Mar06 Sep06 Mar07 Sep07 Mar08 Sep08 Mar09 Sep09 Mar10 Sep10 Mar11 Sep11 Mar12 Sep12 Mar13

United States

New Jersey

New York State

NYC Metro

Fairfield Apr

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


Conclusion

• Economic recovery has continued across the tri-state region

• New York metro region snapped back quickly from Sandy

• Drag from housing finally appears to be behind us


Are Recent College Graduates Finding Good Jobs? Richard Deitz, Assistant Vice President

Overview • How bad is unemployment and underemployment

for recent college graduates?

• How have recent college graduates in our region fared?

• Are recent college graduates in some majors having better outcomes than others?


How Bad is Unemployment and Underemployment for Recent College Graduates?

Source: U.S. Census Bureau and U.S. Bureau of Labor Statistics, Current Population Survey. Note: College graduates are those with a BA degree or higher; recent college graduates are those aged 22-27; figures exclude those currently enrolled in school. 14

0%

2%

4%

6%

8%

10%

12%

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Working Age Population

All College Graduates

Apr 2013

Recent Graduates

Shading indicates NBER recessions

Unemployment Rate

U.S. Unemployment Rates 12-Month Moving Average

15

0%

2%

4%

6%

8%

10%

12%

Age 22

Age 23

Age 24

Age 25

Age 26

Age 27

Age 28

Age 29

Age 30

Age 31

Age 32

Age 33

Age 34

Age 35

Unemployment Rate

2009-11

2000

U.S. Unemployment Rate by Age College Graduates

Source: U.S. Census Bureau, American Community Survey. Note: College graduates are those with a BA degree or higher; figures exclude those currently enrolled in school.

College Graduate Underemployment

• Classify jobs into two categories based on information from the Department of Labor:

Bachelor’s degree required: • e.g., pharmacist, social worker, software developer

Bachelor’s degree not required: • e.g., retail salesperson, food server, electrician,

health care technician

• Graduates working in these jobs are considered underemployed


17

20%

25%

30%

35%

40%

45%

50%

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

All College Graduates

Recent Graduates

2012

Annual Shading indicates NBER recessions

Underemployment Rate

U.S. Underemployment Rates

Source: U.S. Census Bureau and U.S. Bureau of Labor Statistics, Current Population Survey, March Supplement; U.S. Department of Labor, O*NET. Note: College graduates are those with a BA degree or higher; recent college graduates are those aged 22-27; figures exclude those currently enrolled in school.

18

0%

10%

20%

30%

40%

50%

60%

Age 22

Age 23

Age 24

Age 25

Age 26

Age 27

Age 28

Age 29

Age 30

Age 31

Age 32

Age 33

Age 34

Age 35

Underemployment Rate

2009-11

2000

U.S. Underemployment Rate by Age College Graduates

Source: U.S. Census Bureau, American Community Survey; U.S. Department of Labor, O*NET. Note: College graduates are those with a BA degree or higher; figures exclude those currently enrolled in school.

How Have Recent College Graduates in Our Region Fared?

20

46% 49% 44% 46%

6% 5%

7% 7%

0%

10%

20%

30%

40%

50%

60%

United States Upstate NY Downstate NY Northern NJ

Underemployment

Unemployment

Total 52% 54%

51% 54%

Regional Unemployment & Underemployment Recent College Graduates, Share of Labor Force, 2009-11

Source: U.S. Census Bureau, American Community Survey; U.S. Department of Labor, O*NET. Note: Recent college graduates are those with a BA degree or higher aged 22-27; figures exclude those currently enrolled in school.

Are Recent College Graduates in Some Majors Having Better Outcomes Than Others?

Employment Outcomes by Major Recent College Graduates, Share of Labor Force, 2009-11

22

Leisure & Hospitality

Agriculture & Nat Resources

Technologies

Communications

Liberal Arts

Business

Social Sciences

Sciences

Architecture & Construction

Math & Computers

Health

Education

Engineering

63%

57%

55%

54%

52%

50%

48%

43%

32%

29%

22%

22%

20%

4%

5%

6%

6%

8%

6%

7%

6%

8%

6%

3%

4%

5%

% in Jobs Where BA Degree Required

Unemployment Rate

% in Jobs Where BA Degree Not Required

Source: U.S. Census Bureau, American Community Survey; U.S. Department of Labor, O*NET. Note: Recent college graduates are those with a BA degree aged 22-27; figures exclude those currently enrolled in school and those with a graduate degree.

33%

38%

38%

40%

40%

44%

45%

51%

60%

65%

75%

75%

75%

Average Annual Wages by Major Recent Graduates, Adjusted for Demographics, 2009-11

23

$0k $10k $20k $30k $40k $50k $60k

Education

Liberal Arts

Sciences

Communications

Leisure & Hospitality

Agriculture & Nat Resources

Social Sciences

Architecture & Construction

Technologies

Health

Math & Computers

Business

Engineering

BA Degree Required BA Degree Not Required

High School Diploma Only

Associates Degree Only

Source: U.S. Census Bureau, American Community Survey; U.S. Department of Labor, O*NET. Note: Estimated using data for those 27 and under; figures exclude part-time workers and those with a graduate degree.

$55k

$51k

$51k

$49k

$48k

$46k

$44k

$42k

$42k

$41k

$40k

$38k

$35k

Summary • Relatively high unemployment and underemployment

is not unusual for recent college graduates as it takes time to transition into the labor market.

• However, evidence suggests young college workers have been struggling more in recent years.

• Majors that provide technical training and are geared toward growing parts of the economy have tended to fare better.

• Regardless of major, those with college degrees still tend to have better labor market outcomes than those without.


Appendix

26 Source: U.S. Census Bureau, American Community Survey.

Agriculture and Natural Resources Agriculture Environment and

Natural Resources Architecture and Construction Architecture Construction Services Business Business Communications Communications Education Education Administration and Teaching Engineering Engineering Health Medical and Health

Sciences and Services

Leisure and Hospitality Cosmetology Services and Culinary Arts Physical Fitness, Parks, Recreation, and Leisure Liberal Arts Area, Ethnic, and

Civilization Studies English Language, Literature, and Composition Fine Arts History Liberal Arts and Humanities Library Science Linguistics and Foreign Languages Philosophy and Religious Studies Theology and Religious Vocations Math and Computer Sciences Computer and

Information Sciences Mathematics and Statistics

Sciences Biology and Life Sciences Physical Sciences Social Sciences Criminal Justice and Fire Protection Family and Consumer Sciences Law Psychology Public Affairs, Policy, and Social Work Social Sciences Technologies Communication Technologies Electrical and Mechanic Repairs and Technologies Engineering Technologies Nuclear, Industrial Radiology, and Biological Technologies Transportation Sciences and Technologies

Major Field Groupings Based on the American Community Survey

Hurricane Sandy

Total Employment Seasonally Adjusted Index


27

88

90

92

94

96

98

100

102

104

106


United States

New Jersey

Puerto Rico

New York State

New York City



May

New York City Securities Employment Seasonally Adjusted Levels

28

60

90

120

150

180

210

240

2,500

2,750

3,000

3,250

3,500

3,750

4,000

1966 1971 1976 1981 1986 1991 1996 2001 2006 2011

Securities Employment

(left axis)

Total Employment Minus Securities

(right axis)

Shading indicates time between securities and

total employment troughs

Thousands Thousands

May
