New website available at www.comptroller.nyc.gov/EconomicData

NYC’s economy continued to grow, as both the number of jobs and earnings rose

For the first time ever, venture capital in the New York City Metro Area outpaced both San Francisco and Silicon Valley

(New York, NY) — Between July and September 2017, New York City’s economy continued to grow, expanding by 3.6%, according to an analysis released today by New York City Comptroller Scott M. Stringer. The report also shows that while average wages grew moderately and venture capital investment in the City reached an all-time high in the third quarter of 2017, 45% of the new jobs created were in low-wage industries.

In addition to releasing the report, Comptroller Stringer launched a new website — www.comptroller.nyc.gov/EconomicData — that presents data on the City’s economy in an accessible, open, and easy to manipulate way. This will allow everyday New Yorkers, policymakers, and economists to explore the data that underpins the Comptroller’s Quarterly Economic Reports and analyze the City’s economic performance over time.

“In an age of ‘alternative facts,’ transparency matters. Everyone should be able to access economic data in a digestible way — and we’ve developed a new, innovative tool to do just that. Sunlight matters now more than ever,” New York City Comptroller Scott M. Stringer said. “Our economic analysis shows that New York City’s economy is continuing to grow — but it’s a mixed bag. Both employment and venture capital are near record highs, and wages are finally starting to grow. But from the high number of low-wage jobs, to the city’s affordability crisis, to chaos in Washington around budgeting, there are concerns on the horizon. My office will keep crunching the numbers New Yorkers need — so we can plan today for anything that happens tomorrow.”

Released every three months, the Comptroller’s Quarterly Economic Update tracks New York City’s economic health and analyzes the City’s economy in a national context. The report includes information on economic growth, unemployment, average wages, business activity, real estate transactions, and other economic indicators. For the first time ever, the report and its underlying data are available on an interactive website at www.comptroller.nyc.gov/EconomicData.

Findings include:

Economic Growth Continued to Speed Up

  • In the 3rd quarter of 2017, New York City’s economy grew at a rate of 3.6% — up from 3.3% in the previous quarter, and triple the growth rate of 1.2% in the 3rd quarter of 2016;
  • The City’s economy out-performed the national economy, growing 3.6%, compared to 3.0% nationwide.

Job Growth Remained Robust, But Concerns About Low-Wage Jobs Lingered

  • In the 3rd quarter, New York City added 29,000 private sector jobs, for a seasonally-adjusted annual rate of growth of 2.7%. Job growth in the city accelerated from last quarter, and was once again stronger than the rest of the country;
  • Since the city’s economic recovery began at the end of 2009, the city has added an average of 23,500 jobs per quarter — resulting in an average annual growth rate of 2.7%. Over the same time period, the national growth rate was just 2.0%;
  • The City’s unemployment rate, adjusted for seasonality, was 4.9% in the 3rd quarter — up from an all-time low of 4.3% in the 1st and 2nd quarters of the year – but initial unemployment claims continue below trend;
  • Continuing a years-long trend, most of the new private-sector jobs added in the 3rd quarter — 13,100 jobs, or 45.0% — were in low-wage industries. An almost equal number, 13,000 jobs (44.9%) were in medium-wage industries;
  • The remainder of the jobs created in the 3rd quarter, 10.1%, were in high-wage industries. On this metric, New York City is lagging the nation — in the 3rd quarter, 16.2% of all new jobs in the United States were in high-wage jobs;
  • Just 36% of new jobs were in the export sector, which provides goods and services to those outside the NYC metro area, while the remainder were in the local job sector. Export sector job growth typically leads to the creation of more local sector jobs.

Average Wages in New York City Rose Modestly

  • Average hourly earnings for private employees in New York City rose 2.7% compared to the 3rd quarter of 2016 to $34.95. This was the largest third-quarter gain since 2015;
  • Similarly, Personal Income Tax (PIT) revenues rose 7.8% year-over-year. PIT revenues are made up of two sources, which account for income based on wages and from non-wage sources:
  • Withholding tax revenues on wage income rose 14.0% compared to the 3rd quarter of 2016;
  • Estimated tax payments on non-wage income, such as interest, rental income, and capital gains, fell 5.7% year-over-year.

Venture Capital Registered a Record High

  • After multiple quarters of falling venture capital investment, New York City saw an uptick in the 2nd quarter of 2017. That growth continued in the 3rd quarter, and venture capital investment in the New York City metro area reached an all-time high of $4.23 billion;
  • For the first time ever, New York City saw more venture capital investment than both San Francisco and Silicon Valley;
  • This massive increase in New York City-based venture capital was in a large part due to a $3 billion investment in WeWork.

New York City’s Real Estate Markets Showed Mixed Data

  • In the 3rd quarter of 2017, new commercial leasing activity in Manhattan reached 8.1 million square feet — 17.2% higher than the 3rd quarter of 2016, and the highest level of 3rd quarter leasing since 2006;
  • The Manhattan housing market softened in the 3rd quarter of 2017. After nine straight quarters of growth, average sales prices and average price per square foot fell to $2 million (down 1.3% year-over-year) and $1,678 (down 11.5% year-over-year), respectively;
  • Similarly, housing market prices in Brooklyn softened, as the average sales prices fell 0.2% year-over-year to $981,623;
  • In Queens, however, the average sales price rose 9.3% year-over-year to $614,492;
  • The rental market was mixed, with the number of new leases in September 2017 declining 10.7% in Manhattan, falling 4.1% in Brooklyn, but increasing 0.7% in Queens, when compared to September 2016;
  • Over the same time period, average asking rents fell 0.6% in Manhattan and 2.3% in Brooklyn, while they grew 3.5% in Queens.

Positive Leading Economic Indicators Point to Future Growth

  • Overall leading economic indicators for the City, originally introduced to the Comptroller’s Quarterly Economic Update earlier this year, point to growth in the coming months;
  • As reported by ISM-New York, the business condition index — which measures business procurement professionals’ view of the current state of the economy — rose to 56.4% in the 3rd quarter, up from 52.7% last quarter. A reading above 50% indicates economic growth;
  • The ISM-NY six-month outlook, which predicts economic growth over the next six months, fell to 59.0% from 69.4%. While still above 50% — which indicates future growth — this change shows less optimism.

To view the full report, visit Comptroller Stringer’s new, interactive webpage at www.comptroller.nyc.gov/EconomicData or click here for a PDF.

 

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