The latest edition of the Federal Reserve Bank of New York’s Second District Highlights, Job Declines in New York-New Jersey Region to Slow in 2003; Modest Growth Seen for 2004 is available.
Overview of the New York State-New Jersey Region
Employment in the New York-New Jersey region will decline for the third straight year in 2003--but only slightly--and the region’s economy is poised to rebound in 2004 with 1.0 percent growth, or a gain of 128,000 jobs, according to New York Fed economists James Orr and Rae Rosen.
The authors caution that trends in the national economy and in the financial markets will be essential to the region’s employment outlook. In particular, slower-than-projected national growth and renewed weakness in the stock market would likely dampen the job forecast, especially for New York City, with its concentration in the financial services sector.
For 2003, the authors estimate that the region’s decline in employment will be much less steep than the 1.2 percent fall in 2002. They anticipate a 0.3 percent reduction, or 36,000 fewer jobs, in regional employment for this year.
New York State Employment
New York State employment for 2003, according to the authors’ forecast, will slip 0.6 percent, a loss of 53,000 jobs, which is a marked improvement over the 1.8 percent decline in 2002. For 2004, the authors expect employment to grow 0.8 percent, or 70,000 jobs, in the state. The projected gradual upturn in the national economy should fuel job growth, particularly in the sectors of professional and business services, leisure and hospitality, and information.
New York City Employment
New York City--which has accounted for two-thirds of New York State’s job losses in the current downturn--is also seeing improvement, Orr and Rosen say. Although jobs are projected to fall 1.6 percent, or 56,000 jobs, for the whole of 2003, the city should post nominal gains for the second half of this year. Orr and Rosen attribute this year’s net slide to the depth of earlier losses in the first half of 2003, which will prevent any year-over-year gains from materializing until late 2003.
In 2004, a 0.6 percent expansion, or 21,000 jobs, is expected by Orr and Rosen. Professional and business services as well as information are likely to emerge as the main sources of growth. Assuming the national economy picks up, both sectors should see an intensification of demand. The rise will spur overall growth in New York City because of the city’s high concentration of jobs in these sectors.
New Jersey Employment
In New Jersey, Orr and Rosen project employment will expand 0.4 percent in 2003, or 17,000 new jobs, primarily in education and health care. Continued acceleration is projected largely in professional and business services along with modest expansion in construction and in trade, transportation, and utilities, as well as some anticipated gains in finance.
James Orr is a research officer and Rae Rosen is an assistant vice president and senior economist at the Federal Reserve Bank of New York.