New Analysis Shows New York City’s Economy Continues Steady Growth
August 16, 2017
NYC’s economy grew 3.3% in the second quarter of 2017, more than double the 1.5% growth seen a year ago
Number of employed New Yorkers jumped 87,200 — the largest increase in more than three decades
(New York, NY) — New York City’s economy picked up in the spring and summer of 2017, according to a new analysis from New York City Comptroller Scott M. Stringer. The new quarterly report found economic growth of 3.3% in the second quarter of this year — more than double the growth from the same quarter last year. The report also highlighted record-setting jobs numbers, rising venture capital investment, and leading economic indicators that point to growth.
“Since the Great Recession, our growth has outpaced other cities and states — and New York City seems to be hitting its stride. From record-high job numbers, to more robust wages, to new investment, we’re seeing a stronger economy than at any time in recent memory,” New York City Comptroller Scott M. Stringer said. “But our work isn’t done. We must have an economy that delivers for everyone. Yet, the majority of jobs we’re creating are in low-wage industries — and New Yorkers are still suffering from a crisis of affordability. We have to ensure that the jobs we’re creating are good-paying ones, and as the uncertainty in Washington grows every day, we have to prepare now for whatever could come down the road.”
Released every three months, the Comptroller’s Quarterly Economic Update tracks important data on New York City’s economic health, as well as 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.
Economic Growth Accelerated
- In the 2nd quarter of 2017, New York City’s economy grew at a rate of 3.3% — up from 2.6% in the first quarter of this year;
- The rate of economic growth in the 2nd quarter of 2017 was more than double the 1.5% growth rate of the second quarter of 2016;
- This quarter, the City’s economy out-performed the national economy, growing 3.3%, compared to 2.6% nationwide.
Job Growth Continued, Breaking Historical Records
- New York City added 23,400 private sector jobs in the 2nd quarter, for a 2.5% seasonally adjusted annual rate of growth. Job growth in the city was slower than last quarter, but stronger than the rest of the country;
- Adjusted for seasonality, the City’s unemployment rate was 4.3% in the 2nd quarter — the same as the 1st quarter of 2017, and the lowest on record;
- Continuing a multi-year trend, however, most of the private-sector jobs added in the 2nd quarter of 2017 — nearly 40% — were in low-wage industries;
- The export sector — which provides goods and services to those outside the NYC metro area — added more than twice as many jobs as the local job sector. Because export sector jobs typically create local sector jobs, this is good news for the City’s job market;
- Since the end of 2009 — when the Great Recession ended in New York City — the city’s private sector has added an average of 23,500 jobs per quarter;
- The number of employed City residents reached a record high of nearly 4.1 million in the 2nd quarter of 2017 — an increase of 87,200 over the 1st quarter, and the largest quarterly gain since 1985;
- The City’s labor force — the number of New Yorkers employed or looking for a job — reached a historical high of more than 4.2 million, increasing by a record 90,800. As a result, the City’s labor force participation rate rose to a record high of 61.5%.
Wages Continued to Rise
- Average hourly earnings of all private employees in New York City, a proxy for personal income, rose 4.8% year-over-year (i.e. comparing the second quarter of 2017 to the second quarter of 2016) to $35.10.
- While overall wages rose in the 2nd quarter of 2017, Personal Income Tax (PIT) revenues — a proxy for total personal income — fell 2% on a year-over-year basis, driven by lower income from investments and other non-wage sources:
- The decline in PIT revenues came from a drop in estimated tax payments, which accounts for non-wage income from sources like capital gains and rental income;
On the other hand, the second component of PIT revenues — withholding tax revenues, which serves as a proxy for income from wages — rose 6.5%.
Reversing Recent Trends, Venture Capital Investment Rose
- Reversing a multi-quarter trend, venture capital investment in the New York City metropolitan area shot up 66.3% in the 2nd quarter of this year, hitting roughly $2.8 billion;
- In the 2nd quarter, the New York area’s share of venture capital investment increased to 15.1% — almost twice the share of a year ago.
New York City’s Housing Market Showed Mixed Data
- On a year-over-year basis, average residential sales prices grew 7.9% in Manhattan, 22.1% percent in Brooklyn, and 12.4% in Queens;
- The number of 1- to 3-family homes sold in Brooklyn grew 58% year-over-year, while the number of sales in Queens increased 46.2%;
- However, when comparing June 2017 and June 2016, average rental prices fell 0.2% in Manhattan and 0.6% in Brooklyn, while rising 0.6% in Queens;
- Once again comparing June 2017 and June 2016, the number of new residential leases increased by 26.9% in Manhattan, 61.5% in Brooklyn, and 22% in Queens;
Leading Economic Indicators are Mixed, But Still Point to Growth
- Overall leading economic indicators for the City — which were introduced to the Comptroller’s Quarterly Economic Update last quarter — were mixed, but still pointed to growth on the horizon;
- The current business condition index — reported by ISM-New York — fell from 55.1% in the first quarter to 52.7% in the 2nd This is, however, still an improvement from 46.5% a year ago, and any reading above 50% indicates economic growth;
- The ISM-NY six-month outlook, which predicts economic growth over the next six months, moved similarly, but showed stronger confidence in short-term economic growth;
- In addition, initial unemployment claims continued to decline on a year-over-year basis for the 11th consecutive quarter;
- Finally, the total number of building permits in the City rose 49.2% on a year-over-year basis, reaching 5,680 in the 2nd quarter of 2017.