The document summarizes NYC's economy and past economic downturns. It finds that NYC typically rebounds 1-2 years after the US from local and financial downturns. NYC has grown highly dependent on the high-income securities sector. Past financial crises caused NYC job losses up to 17% and income declines over 30%, while the current downturn's impact has been less severe so far.

1. Overview of NYC's Economy
Jason Bram, Federal Reserve Bank of New York
December 3, 2009
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.

2. Index of Coincident Economic Indicators
Index: July 1992 = 100 Index: July 1992 = 100
170 170
NYC
160 160
150 150
140 140
NY
130 130
NJ
120 120
110 110
100 100
90 90
1985 1990 1995 2000 2005
Source: FRBNY Note: Shading represents local economic downturns.

3. Unemployment Rate: USA vs. Region
Percent of Labor Force Percent of Labor Force
15 15
12 12
NYC
9 9
US
NY
6 6
NJ
3 3
0 0
1976 1981 1986 1991 1996 2001 2006
Source: NYS Dept. of Labor and FRBNY staff calculations Note: Shading represents U.S. recessions.

4. Private Sector Job Growth: U.S. and NYC
Percent 12-Month Percent Change in Private Sector Employment Percent
8 8
6 6
U.S. NYC
4 4
2 2
0 0
-2 -2
-4 -4
-6 -6
-8 -8
1968 1976 1984 1992 2000 2008
Source: Bureau of Labor Statistics and Moody's Economy.com

5. Finance Sector’s Share of
NYC Employment and Earnings
40%
Finance ex-Securities
35%
Securities
30%
25%
20%
15%
10%
5%
0%
1972 1987 2000 2007 US 1972 1987 2000 2007 US
2007 2007
NYC Employment NYC Earnings

6. NYC Employment: Securities and All Other
Thousands Thousands
3,300 220
NYC Securities
Industry
3,200 200
Employment
(left axis)
3,100 180
3,000 160
2,900 140
NYC Employment
excluding
2,800 Securities 120
(right axis)
2,700 100
2,600 80
2,500 60
2,400 40
1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 2008
Source: NYS Dept. of Labor and FRBNY staff calculations Note: Shading represents U.S. recessions.

7. NYC Employment
Thousands Thousands
4,000 4,000
1969-1976 1989- 2001-
1992 2003
3,800 3,800
Total Employment
3,600 3,600
3,400 3,400
3,200 3,200
3,000 3,000
1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
Source: NYS Dept. of Labor and FRBNY staff calculations Note: Shading represents local economic downturns.

8. NYC Employment
Thousands Thousands
4,000 4,000
1969-1976 1989- 2001-
1992 2003
3,800 3,800
Total Employment
3,600 3,600
2001-2003
scenario
3,400 3,400
3,200 3,200
3,000 3,000
1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
Source: NYS Dept. of Labor and FRBNY staff calculations Note: Shading represents local economic downturns.

9. NYC Employment
Thousands Thousands
4,000 4,000
1969-1976 1989- 2001-
1992 2003
3,800 3,800
Total Employment
3,600 3,600
2001-2003
scenario
3,400 3,400
1989-1992
scenario
3,200 3,200
3,000 3,000
1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
Source: NYS Dept. of Labor and FRBNY staff calculations Note: Shading represents local economic downturns.

10. Job Losses in Previous Major Financial
Downturns (peak to trough) in New York City
Decline in Decline in Decline in Total
Downturn Securities Financial Sector Private-Sector
Industry Employment Employment
Employment
August 1969 – 49,000 60,000 601,000
May 1976 (40%) (13%) (18%)
September 1987 – 39,000 96,000 343,000
June 1993 (21%) (17%) (11%)
December 2000 – 39,000 60,000 229,000
October 2003 (19%) (12%) (7%)
March 2008 — 31,500 43,500 132,000
Oct.. 2009 (so far) (15%) (9%) (4%)

11. Annual Change in Real Earnings: NYC and U.S.
40% 40%
NYC: Securities
30% 30%
US: All
20% 20%
Industries
10% 10%
0% 0%
-10% -10%
NYC: All Industries
-20% -20%
-30% -30%
1970 1975 1980 1985 1990 1995 2000 2005
Source: BEA

12. House and Apartment Prices: U.S. and Region
4-Quarter % Change 4-Quarter % Change
50 50
40 40
30 30
House Price Index: Avg. Apartment Price:
NY Metro Manhattan
20 20
10 10
0 0
House Prices Index:
U.S.
-10 -10
-20 -20
-30 -30
1988 1992 1996 2000 2004 2008
Source: S & P / Case Shiller; Miller Samuel, FRBNY staff calculations
Recent figures for apartment price are based on resales only.

13. Summary
• After past local & financial downturns, NYC’s economy
has typically turned the corner 1-2 years after the US.
• NYC has become increasingly dependent on high
income securities sector
• The effects of the financial turmoil continue to affect
employment and income.
• Past financial downturns have led to job losses of up to
17% and income declines of more than 30%; this one
doesn’t seem to have been that severe, thus far.