Labor Market Conditions in the Region

Economic Press Briefing: December 4, 2018

The views expressed here are those of the presenter and do not necessarily represent those ofthe Federal Reserve Bank of New York or the Federal Reserve System.

The 2nd Federal Reserve DistrictRegions in the District

FEDERAL RESERVE BANK OF NEW YORK

Upstate NY

NorthernNJ

Downstate NY1

Puerto Rico &

U.S. Virgin Islands

Overview• Job growth has been strong in New York City, moderate

nearby, and sluggish in upstate New York. Puerto Ricoand the USVI are still recovering from the storms.

• Labor markets have tightened across the region, even inparts of upstate New York with little or no job growthduring the expansion. As a result, wage growth haspicked up throughout the region.

• The types of jobs gained differ within the region. Thus,even with tight labor markets, it may still be challengingfor some workers without the skills desired in their localarea to find a good job.

FEDERAL RESERVE BANK OF NEW YORK 2

Job Growthin the Region

Job Growth in the RegionIndexes of Total Employment, Seasonally Adjusted

Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com; regional data are early benchmarked by FRBNY staff. 4

79

86

93

100

107

114

121

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Downstate NY

United States

Upstate NY

NorthernNJ

PuertoRico

Oct

Index (Dec2007 = 100)

Shading indicates NBER recession.

PR and the USVI Still RecoveringIndexes of Total Employment, Seasonally Adjusted

Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com; data are early benchmarked by FRBNY staff.

70

80

90

100

110

-12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30

PR (Maria – Sep 2017)

USVI (Irma/Maria – Sep 2017)

New Orleans(Katrina – Aug 2005)

NY-NNJ Coastal Counties(Sandy – Oct 2012)

Months Before Hurricane Months After Hurricane

Index (Month Before Hurricane = 100)

5

NYC Remains an Engine of Job GrowthIndexes of Total Employment, Seasonally Adjusted

Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com; data are early benchmarked by FRBNY staff. 6

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Index (Dec2007 = 100)

Shading indicates NBER recession.86

93

100

107

114

121

New YorkCity

LongIsland

Fairfield CT LowerHudsonValley

Oct

Sluggish Job Growth in Upstate NYIndexes of Total Employment, Seasonally Adjusted

Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com; data are early benchmarked by FRBNY staff. 7

Index (Dec2007 = 100)

Albany

Buffalo Rochester

Syracuse

Binghamton

Utica

Shading indicates NBER recession.

Oct

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 201986

93

100

107

114

121

Tight Labor Marketsin the Region

Exceptionally Low UnemploymentLong-Run and Current Rates, Seasonally Adjusted

Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com. 9

6.1

5.1 5.0

7.8

5.1

6.1

4.14.8

5.35.8

6.2 6.15.8 5.9 5.8

8.3

3.7 3.5 3.74.0 4.0 4.0

3.6 3.64.1 4.1 4.1 4.2 4.4 4.5 4.6

5.3

0%

2%

4%

6%

8%

10%

United States

LongIsland

New York City

Ithaca

AlbanyRochester

Syracuse

GlensFalls

BuffaloUtica

Elmira

Binghamton

Watertown

Fairfield

NorthernNew

JerseyLowerHudson

Valley

Long-Run AverageCurrent

Little or NoJob Growth

Regional Labor Force TrendsIndexes of Total Labor Force, Seasonally Adjusted

10Source: U.S. Bureau of Labor Statistics, Current Population Survey and Moody’s Economy.com.

88

92

96

100

104

108

112

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

New York City

United States

Upstate NY

NorthernNJ

Upstate NYMetros with

Little or No Growth

LongIsland Upstate NY

Metros with Some Growth

Index (Dec2007 = 100)

Shading indicates NBER recession.

More Firms Increasing WagesFRBNY Business Leaders Survey

Source: Federal Reserve Bank of New York; data expressed as a 12-month moving average. 11

0%

10%

20%

30%

40%

50%

Jan15 Jul15 Jan16 Jul16 Jan17 Jul17 Jan18 Jul18 Jan19

% ReportingWage Increases

Nov

Wage Growth Has Picked Up in the RegionFRBNY Supplemental Survey

Source: Federal Reserve Bank of New York. 12

0%

1%

2%

3%

4%

5%

6%

Jan2017

Feb2018

Nov2018

Jan2017

Feb2018

Nov2018

Business Leaders Survey Empire State Manufacturing Survey

By about what percentage, on average, has a typical worker’s wage/salary (not including benefits) changed over the past 12 months?

3.0

3.84.2

2.8

3.4

4.0

Types of Jobs Gainedin the Region

Job CategoriesMedian Annual Wages By Occupation, United States

Source: U.S. Bureau of Labor Statistics, Occupational Employment Statistics (2017).

Below $30,000

Healthcare SupportSales

Building MaintenancePersonal Care

Food Preparation

$30,000-$60,000

EducationArts & Entertainment

ConstructionInstallation & Repair

Social ServicesProtective Services

Administrative SupportProduction

Transportation

Above $60,000

Management Computer & Math

LegalEngineering

Business & FinanceHealthcare Practitioners

Sciences

Lower Wage Middle Wage Higher Wage

30% 50% 20%

14

Recent Job Gains in the United StatesNet Change in Employment, 2015 to 2017

Source: U.S. Bureau of Labor Statistics, Occupational Employment Statistics (2015-2017).

-500

0

500

1,000

1,500

2,000

Lower Wage

Middle Wage

Higher Wage

Thousands

15

Recent Job Gains in the United StatesNet Change in Employment, 2015 to 2017

Source: U.S. Bureau of Labor Statistics, Occupational Employment Statistics (2015-2017).

-250

0

250

500

750

1,000 Thousands

FoodPrep

PersonalCare

Transportation

AdministrativeSupport

Production

HealthcarePractitioners

ConstructionEducation

Business & Finance

Computer& Math

Management

Installation& Repair

16

The Shape of Recent Job GainsNet Change in Employment, Thousands, 2015 to 2017

Source: U.S. Bureau of Labor Statistics, Occupational Employment Statistics (2015-2017).

United States Downstate NY

New Jersey-500

0

500

1,000

1,500

2,000

-30

0

30

60

90

-12

0

12

24

36

48

60

LowerWage

MiddleWage

HigherWage

-6

0

6

12

18Upstate NY

17

Recent Job Gains in Downstate NYNet Change in Employment, 2015 to 2017

Source: U.S. Bureau of Labor Statistics, Occupational Employment Statistics (2015-2017).

-15

0

15

30

45 Thousands

FoodPrep

PersonalCare

Transportation

Administrative Support

Production

HealthcarePractitioners

Construction

Education

Business & Finance

Computer& Math

Management

Healthcare Support

Protective Installation & Repair

18

Recent Job Gains in Upstate NYNet Change in Employment, 2015 to 2017

Source: U.S. Bureau of Labor Statistics, Occupational Employment Statistics (2015-2017).

-15

-10

-5

0

5

10

15 Thousands

FoodPrep

PersonalCare

Transportation

Administrative Support

Production

HealthcarePractitioners

Construction

Computer& MathInstallation

& Repair

19

Recent Job Gains in New JerseyNet Change in Employment, 2015 to 2017

Source: U.S. Bureau of Labor Statistics, Occupational Employment Statistics (2015-2017).

-10

0

10

20

30

40

50 Thousands

FoodPrep

PersonalCare

Transportation

HealthcarePractitioners

Business & Finance

HealthcareSupport

20

Summary

• New York City remains an engine of growth in the region,while job growth has been slower in Northern New Jerseyand upstate New York.

• Sustained job gains through the expansion coupled with alack of growth in much of the region’s labor force hasresulted in tight labor markets throughout the region.

• With tight labor markets, unemployment is exceptionallylow in many parts of the region and there are signs thatwage growth has picked up.

FEDERAL RESERVE BANK OF NEW YORK 21

Labor Market Conditions in the Region

Economic Press Briefing: December 4, 2018

The views expressed here are those of the presenter and do not necessarily represent those ofthe Federal Reserve Bank of New York or the Federal Reserve System.