December 16, 1998


Enclosed for your review is the latest issue of the New York Fed's Second District Highlights: New York-New Jersey Region's Job Growth to Continue in 1999, but Risks Have Risen.

Some 145,000 new jobs will be created in the region during 1999, a growth rate of 1.2 percent, according to authors James Orr, a research officer in the Bank's Domestic Research area, and Rae D. Rosen, a senior economist in the Bank's Public Information area.

Orr and Rosen expect 1998 job growth to be 1.7 percent, or slightly more than 200,000 new jobs--continuing the regional recovery that began in late 1992.

A possible slowdown in the national economy combined with reductions in financial services industry activity in New York City will contribute to the decline in employment growth expected in 1999.

Orr and Rosen's 1999 forecast also indicates that:

  • New York City will see healthy job growth of 1.4 percent in 1999, with the services sector again leading job creation, followed by the trade, construction, transportation, communications, and public utilities sectors.
  • Employment growth will be 1 percent in New York State next year, with the momentum coming mainly from New York City and downstate urban areas.
  • As in 1998, business services and construction will generate new jobs in New Jersey, helping growth to reach 1.6 percent.
  • The main area of risk to the region will be a slowdown in the financial services industry, which saw its fortunes begin to turn after August's market turmoil. A prolonged decline in this sector could raise questions about the region's ability to sustain job growth in 2000.

Contact: Douglas Tillett

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