The latest edition of the Federal Reserve Bank of New York's Second District Highlights, New York and New Jersey Poised for Modest Job Growth in 2005, is available.
Overview of New York State and New Jersey
After declining since 2000, employment in New York and New Jersey is expected to expand in 2004 and 2005. In 2004, the two states combined appear likely to add jobs at a rate of 0.9 percent – reflecting the net addition of about 115,000 new jobs – and this growth rate should expand to 1.1 percent in 2005, according to New York Fed economists James Orr and Rae Rosen.
The authors observe that the ongoing recovery of the national economy has supported a pickup in the states' job growth in the "export" components of industries such as trade, transportation, tourism, finance, and professional and business services. They add that estimates suggest that the employment downturn associated with 9/11 has largely passed.
The long-term expansion of jobs in the education and health sectors in both states continues apace, according to Orr and Rosen. Finance jobs have expanded modestly, although mostly outside New York City. Jobs in New York State and New York City have not bounced back as readily in this recovery as they have in New Jersey, and job levels throughout New York State remain far below their prerecession peaks. Potential risks to the employment outlook include slower than expected growth in the national economy or a falloff in financial market activity.
New York State Employment
For 2004, New York State employment should improve gradually, with a growth rate of 0.6 percent, and jobs should continue to increase at a rate of 0.9 percent in 2005, according to the authors.
New York City Employment
The authors expect a gradually improving labor market in New York City, with employment levels growing by 0.7 percent this year and accelerating to 1.1 percent in 2005.
New Jersey Employment
Orr and Rosen observe that by early 2004, New Jersey had regained all the jobs lost during the recession, and has since set record levels of employment. They forecast a 1.5 percent gain in jobs for 2004, rising slightly to 1.6 percent in 2005.
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.