Download Economic Forecast

June 2, 2014
Economic Forecast
OUTPUT AND EMPLOYMENT
WHAT THE TABLE SHOWS:
 New York’s GDP forecast is derived from
2007
2008
2009
2010
2011
2012
2013
2014
2015
each of the 50 states based on employment
United States
shares. So, forecast misses reflect surprises
Real GDP
$ billions (fourth quarter)
% change over the four quarters
the national forecast by allocating output to
$14,996
$14,575
$14,540
$14,942
$15,242
$15,540
$15,942
$16,501
$17,120
1.9%
-2.8%
-0.2%
2.8%
2.0%
2.0%
2.6%
3.5%
3.8%
in the aggregate forecast as well as
unexpected shifts in a state’s GDP share.
 New York has recovered as well as any
Nonfarm employment
Job count (fourth quarter)
% change over the four quarters
Average monthly change
state despite the disruptive crosscurrents in
138,246,000 135,493,667 129,877,667 130,652,000
132,642,667
134,853,667
137,247,667
139,694,848
141,679,460
0.9%
-2.0%
-4.1%
0.6%
1.5%
1.7%
1.8%
1.8%
1.4%
101,667
-229,361
-468,000
64,528
165,889
184,250
184,250
184,250
184,250
its key financial sector and its job market has
fully recovered the losses from the
recession.
New York
Real GDP
KEY MESSAGES:
$ billions (fourth quarter)
$1,001
$982
$989
$1,018
$1,030
$1,044
$1,065
$1,098
$1,139
% change over the four quarters
-0.2%
-1.9%
0.6%
2.9%
1.2%
1.4%
1.9%
3.1%
3.7%
 New York’s economy is forecast to speed up
slightly in 2014 and 2015.
Nonfarm employment
Job count (fourth quarter)
8,764,633
8,731,733
8,488,467
8,588,433
8,714,767
8,833,533
8,956,200
9,091,572
9,208,155
% change over the four quarters
1.3%
-0.4%
-2.8%
1.2%
1.5%
1.4%
1.4%
1.5%
1.3%
Average monthly change
9,403
-2,742
-20,272
8,331
10,528
9,897
10,222
11,281
9,715
Note: GDP figures are based on quarterly values that are
interpolated from annual GDP estimates using quarterly
employment changes. Unbolded figures are reported actual
values and bold figures represent forecasts.
Sources: US Department of Commerce;
US Department of Labor.
Regional Perspectives: New York Economic Outlook
Commercial Banking
2
June 2, 2014
The Economy’s Structure
PERCENT OF TOTAL GDP DERIVED FROM SELECTED INDUSTRIES
WHAT THE CHART SHOWS:
 The figure compares the relative importance
of selected industries to the state’s economy
US industry mix
with the national footprint of each industry
New York industry mix
(state and national figures reflect the value
added of each industry as a percent of
aggregate state or US nominal GDP,
respectively).
 The information and finance industries
Government
Other services
Hotel and food service
Arts, entertainment, and recreation
Health care and social assistance
Educational services
Administrative and waste management services
Management of companies
Professional and technical services
Real estate
Finance and insurance
Information
Transportation
Retail trade
Wholesale trade
Nondudrable manufacturing
Durable manufacturing
Construction
Utilities
Mining
account for a much larger share of the
Agriculture
20
18
16
14
12
10
8
6
4
2
0
region’s GDP, compared with those
industries’ footprints in the national
economy.
KEY MESSAGES:
 New York is faring reasonably well,
considering the outsized footprint of the
financial services industry in the local
economy.
Source: US Department of Commerce. Updated through
2011.
Regional Perspectives: New York Economic Outlook
Commercial Banking
3
June 2, 2014
Bankruptcies
RATIO OF BANKRUPTCY FILINGS TO THE 2007 Q4 NUMBER
WHAT THE CHART SHOWS:
 The figure illustrates trends in bankruptcy
9
9
8
8
7
Business bankruptcy filings
Nonbusiness bankruptcy filings
7
filings by businesses and persons relative to
the number of filings in 2007 Q4, prior to the
recession.
 Bankruptcy filings have retreated to normal
levels.
6
All US bankruptcy filings (shaded area)
6
5
5
4
4
3
3
2
2
1
1
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
0
Regional Perspectives: New York Economic Outlook
KEY MESSAGES:
 Financial distress related to the national
credit crunch in the fall of 2008 has largely
passed.
Source: Administrative Office of the U.S. Courts; Updated
through March 2014.
Commercial Banking
4
June 2, 2014
FRB New York Business Survey
REAL GDP (% CHANGE 12 MONTHS EARLIER)
DIFFUSION INDEXES (0 = NO CHANGE)
WHAT THE CHART SHOWS:
 GDP growth in New York state and the
8
75
Forecast
6
Federal Reserve Bank of New York’s Empire
State survey of views about both the current
state of the economy and expected (six
50
months from now) conditions.
 The index readings represent the net
4
25
difference in the percent expecting
improving conditions and those expecting
2
0
-2
-4
0
New York real GDP (left scale)
FRB-NY's Empire State survey, current
conditions (right scale)
FRB-NY's Empire State survey, expected
conditions (right scale)
worsening conditions.
 The Empire State survey has picked up a bit
and business respondents remain bullish
-25
-50
about the near-term outlook.
KEY MESSAGES:
 Business sentiment surveys are expected to
improve some in the coming months.
-75
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Note: Survey data unavailable prior to 2001.
Sources: Federal Reserve Bank of New York; US
Department of Commerce. Updated through May 2014
(surveys) and 2014 Q1 (GDP).
Note: diffusion indexes represent the percentage of respondents seeing an increase in activity plus one half of the percentage
reporting no change in activity.
Regional Perspectives: New York Economic Outlook
Commercial Banking
5
June 2, 2014
Private Business Surveys
REAL GDP (% CHANGE 12 MONTHS EARLIER)
DIFFUSION INDEXES (50 = NO CHANGE)
WHAT THE CHART SHOWS:
 New York State’s real GDP growth and the
8
100
survey of local businesses conducted by the
NY Association of Purchasing Managers.
Forecast
6
90
80
 The NY-NAPM (New York National
Association of Purchasing Managers) is
pointing to a pickup in activity.
70
4
60
2
50
40
0
-2
NY real GDP (left scale)
30
Current Business Condition, New York
Purchasing Managers Index (right scale)
20
-4
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
KEY MESSAGES:
 The financial sector is not as much of a drag
on the region as earlier feared.
Note: Survey data unavailable prior to 1993.
Sources: Institute of Supply Management; US Department
of Commerce. Updated through April 2014 (survey) and
2014 Q1 (GDP).
10
0
Note: diffusion indexes represent the percentage of respondents seeing an increase in activity plus one half of the percentage
reporting no change in activity.
Regional Perspectives: New York Economic Outlook
Commercial Banking
6
June 2, 2014
Initial Jobless Claims
RATIO OF INITIAL CLAIMS FOR UNEMPLOYMENT INSURANCE TO THE 2007 Q4 LEVEL
WHAT THE CHART SHOWS:
 Layoffs in New York state are compared with
2.25
2.25
the national trend in jobless claims in the
figure.
2.00
New York
US (solid area)
2.00
 Weekly layoffs, both the state and national
tallies, are illustrated in the figure as a ratio
to the level of layoffs in the fourth quarter of
1.75
1.75
2007, prior to the recession.
 Layoffs remain a little elevated relative to
1.50
1.50
pre-recession levels.
KEY MESSAGES:
1.25
1.25
 The slightly elevated level of layoffs likely
reflects “frictions” associated with a diverse
1.00
1.00
economy and the shifting ground under the
financial sector.
New York accounts for 2.6% of auto manufacturing employment
0.75
2007
0.75
2008
2009
2010
Regional Perspectives: New York Economic Outlook
2011
2012
2013
2014
Source: US Department of Labor. Updated through May 17,
2014 (state) and May 24, 2014 (US).
Commercial Banking
7
June 2, 2014
Economic Growth
REAL GDP GROWTH (PERCENT CHANGE FROM FOUR QUARTERS EARLIER)
WHAT THE CHART SHOWS:
 Real GDP growth in New York (the line in
9
8
7
6
5
4
3
2
1
0
-1
-2
-3
-4
-5
-6
New York
US
Forecast
9
8
7
6
5
4
3
2
1
0
-1
-2
-3
-4
-5
-6
the figure) is superimposed on top of US
real GDP growth (bars in the figure).
 New York’s economy has matched the
performance of the national economy so far.
KEY MESSAGES:
 New York’s economy is likely to speed up in
the coming year, tracking the national
economy.
Source: US Department of Commerce. Updated through
2012 (state) and 2014 Q1 (US). Quarterly estimates for
states after 2012 are interpolated from employment figures
(through April 2014), based on the historical correlation of
state and national employment changes.
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
Regional Perspectives: New York Economic Outlook
Commercial Banking
8
June 2, 2014
Economic Output
REAL GDP LEVEL (RATIO TO 2000 Q4)
WHAT THE CHART SHOWS:
 The figure illustrates the evolution of real
1.40
Forecast
1.35
1.40
GDP of the state and the overall US
1.35
the peak of the previous business cycle—
1.30
1.30
1.25
1.25
US
1.20
1.15
1.15
1.10
1.10
New York
that is, at any point in time the lines trace the
ratio of real GDP to its level in 2000 Q4.
 New York lagged the national economy in
the first half of the 2000s, but has matched
1.20
1.05
economy since the fourth quarter of 2000,
1.05
1.00
1.00
0.95
0.95
the national economy’s growth since then.
KEY MESSAGES:
 Notwithstanding the restraints on the state’s
key industry, New York’s economy is back
on track, a strong performance considering
the headwinds that the mature industrial
states face.
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Regional Perspectives: New York Economic Outlook
Source: US Department of Commerce. Updated through
2012 (state) and 2014 Q1 (US). Quarterly estimates for
states after 2012 are interpolated from employment figures
(through April 2014), based on the historical correlation of
state and national employment changes.
Commercial Banking
9
June 2, 2014
Employment Growth
NONFARM PAYROLL EMPLOYMENT (PERCENT CHANGE FROM 12 MONTHS EARLIER)
WHAT THE CHART SHOWS:
 New York’s employment growth, compared
4
4
Forecast
3
New York
US
2
3
2
 Job growth remains strong.
KEY MESSAGES:
 Employment is forecast to expand at a
1
1
0
0
-1
-1
-2
-2
-3
-3
-4
-4
-5
with the nation’s.
moderate pace in coming years.
Source: US Department of Labor. Updated through April
2014 (state) and April 2014 (US).
-5
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
Regional Perspectives: New York Economic Outlook
Commercial Banking
10
June 2, 2014
Employment in Relative Terms
NONFARM PAYROLL EMPLOYMENT (RATIO TO 2000 Q4)
WHAT THE CHART SHOWS:
 The figure illustrates the evolution of
employment in the state compared with the
1.08
1.08
nation since 2000 Q4, the peak of the
1.07
previous business cycle. The lines trace out
1.06
1.06
the ratio of employment at the time to
1.05
1.05
employment in 2000 Q4.
1.04
1.04
1.03
1.03
1.02
1.02
Forecast
1.07
1.01
US
1.01
 New York’s job market lagged the national
economy’s for all of 2000s expansion.
 New York’s businesses have restored or
replaced all of the jobs that were lost during
the recession and then some.
1.00
1.00
0.99
0.99
KEY MESSAGES:
0.98
0.98
 The state is only one of a handful of states,
0.97
0.97
mostly those benefiting from the boom in the
0.96
energy sector, that have fully recovered the
0.95
jobs lost during the recession.
0.96
New York
0.95
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Regional Perspectives: New York Economic Outlook
Source: US Department of Labor. Updated through April
2014 (state) and April 2014 (US).
Commercial Banking
11
June 2, 2014
Employment in Absolute Terms
NONFARM PAYROLL EMPLOYMENT (THOUSANDS)
WHAT THE CHART SHOWS:
 The actual count of payroll employment
9,100
142,500
9,000
expansion.
140,000
New York (left scale)
8,900
8,800
Forecast
8,700
137,500
135,000
8,600
8,500
132,500
8,400
130,000
8,300
 New York’s job market lagged the national
economy’s for all of 2000s expansion.
 The state’s employment count now stands at
a record high.
KEY MESSAGES:
 New York’s employment trends are highly
significant and the state is only one of a
handful of states, mostly those benefiting
US (right scale)
8,200
127,500
from the boom in the energy sector, that
have fully recovered the jobs lost during the
8,100
125,000
8,000
7,900
2006
since 2000 Q4, the peak of the last business
122,500
2007
2008
2009
2010
Regional Perspectives: New York Economic Outlook
2011
2012
2013
2014
recession.
Source: US Department of Labor. Updated through April
2014 (state) and April 2014 (US).
2015
Commercial Banking
12
June 2, 2014
Intrastate Employment
NONFARM PAYROLL EMPLOYMENT IN SELECTED COMMUNITIES (RATIO TO 2000 Q4 LEVEL)
WHAT THE CHART SHOWS:
 Lines are the cumulative percentage change
1.17
US Forecast
US
Ithaca
New York City
1.15
Poughkeepsie
Glens Falls
New York-White Plains
Putnam
Nassau-Suffolk
Albany
1.11
Buffalo
Syracuse
1.09
Rochester
Utica-Rome
Binghamton
Elmira
Kingston
New York State
1.13
1.07
1.17
1.15
Forecast
1.13
1.11
1.09
1.07
New York State Forecast
in employment since 2000 Q4, the peak of
the previous business expansion.
 Employment in most communities has
stabilized or is turning up, although
economic conditions across the state vary
widely. Communities in the western part of
the state have been more challenged than
1.05
1.05
1.03
1.03
1.01
1.01
KEY MESSAGES:
0.99
0.99
 New York City faces the greatest challenge
0.97
0.97
in the coming years, in the wake of the
0.95
0.95
financial market crisis, and the economic
0.93
0.93
adjustments to the financial shock have yet
0.91
0.91
to be fully felt.
those up along the Hudson River.
0.89
0.89
2000
2002
2004
2006
2008
2010
2012
2014
Source: US Department of Labor. Updated through April
2014 (state) and April 2014 (US).
Regional Perspectives: New York Economic Outlook
Commercial Banking
13
June 2, 2014
Unemployment
UNEMPLOYMENT (PERCENT OF THE LABOR FORCE)
WHAT THE CHART SHOWS:
 Trends in New York’s unemployment rate,
12
12
 Unemployment peaked at 9 percent and has
Forecast
10
8
New York
US (shaded)
compared with the national average.
10
been coming down albeit unevenly.
KEY MESSAGES:
8
 The unemployment rate is the single best
indicator of the relative economic
6
6
performance of a region.
 The gradual decline in unemployment is a
sign that the economy is growing faster than
4
4
2
2
0
1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 2018
0
Regional Perspectives: New York Economic Outlook
its underlying potential.
Source: US Department of Labor. Updated through April
2014 (state) and April 2014 2014 (US).
Commercial Banking
14
June 2, 2014
Relative House Prices
RATIO OF THE STATE’S HOUSE PRICES TO THE NATIONAL AVERAGE (1995 Q2 = 1.0)
WHAT THE CHART SHOWS:
 The figure tracks the relative price of houses
1.4
1.4
in the state versus the nation—that is, it
reflects the ratio of the state price index to
the national house price index, with that ratio
1.3
1.3
set to unity in the summer of 1995. A drop
in the line means that house prices in the
state lag the national trend. States that did
1.2
1.2
not suffer from speculative conditions saw a
decline in the relative price of houses in this
last decade.
1.1
1.1
 New York’s real estate markets have lagged
the national upswing, because its real estate
is relatively pricey compared with the
1.0
1.0
0.9
0.9
national average.
KEY MESSAGES:
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
 Real estate prices in New York are
becoming less expensive relative to the
national average.
Source: FHFA. Updated through 2013 Q4.
Regional Perspectives: New York Economic Outlook
Commercial Banking
15
June 2, 2014
Real Estate Markets
HOUSE PRICES IN SELECTED COMMUNITIES (RATIO TO THE 1995 Q2 LEVEL)
WHAT THE CHART SHOWS:
 The figure tracks the cumulative percentage
3.00
3.00
deviation in house prices since 1995 in
2.75
with the national average.
US
2.75
Kingston
Ithaca
2.50
2.25
2.00
Buffalo
Elmira
Glens Falls
Binghamton
Albany-Schenectady
Nassau-Suffolk Metro Division
 Communities that saw the biggest price gains
2.50
2.25
2.00
1.75
1.75
Rochester
1.50
1.25
Syracuse
Utica-Rome
New York State
New York (Case-Shiller)
are now seeing the biggest reversals.
 Real estate markets in New York City have
corrected significantly, but may be stabilizing.
 House prices have been stable in upstate New
York. House prices in Binghamton, Buffalo,
New York Metro Area
Poughkeepsie
selected local markets and compares those
1.50
1.25
Elmira, Rochester, Syracuse, and Utica lagged
the nationwide trends and are steady. Prices in
Albany, Glens Falls, and Ithaca rose faster
than the national average through 2006 and
prices in these communities have slowed
1.00
1.00
0.75
0.75
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
relatively more than in other New York areas.
KEY MESSAGE:
 House prices are likely to be relatively stable in
the coming year.
Sources: FHFA; Standard & Poor’s. Updated through
2013 Q4.
Regional Perspectives: New York Economic Outlook
Commercial Banking
16
June 2, 2014
New Home Building
HOUSING STARTS (RATIO TO THE JULY 1990 LEVEL)
WHAT THE CHART SHOWS:
 The pace of new home building (housing starts)
2.5
2.5
in New York, compared with the national trends.
 New York’s home building trends were
distorted in the past year by New York City
2.0
2.0
regulations in the summer of 2008 that induced
a surge in activity early in the summer and, in
Forecast
that sense, the subsequent downshift in activity
US
New York
1.5
1.5
1.0
1.0
was slightly exaggerated.
 Home building is rebounding.
KEY MESSAGES:
 New York’s housing slowdown is more related
to the recession and the financial crisis that is
0.5
0.5
hurting Wall Street than to inflated housing
markets. The region’s expensive property
values are likely to be a challenge for the
0.0
0.0
2000
2003
2006
Regional Perspectives: New York Economic Outlook
2009
2012
2015
housing market in coming quarters.
Source: Census Department. Updated through March 2014
(state) and April 2014 (US).
Commercial Banking
17
June 2, 2014
Office Markets
PERCENT OF OFFICE SPACE THAT IS VACANT
WHAT THE CHART SHOWS:
 Office market conditions in selected
30
25
20
30
Westchester
Long Island
Downtown Manhattan
Midtown Manhattan
Manhattan
Midtown South
15
markets.
 Vacancy rates in the City have been
relatively stable and market conditions in
25
20
Downtown Manhattan are improving.
KEY MESSAGES:
 New York’s office markets tend to parallel
15
the trends in the national market.
Note: Data for Manhattan and Midtown South are not
available prior to 2006.
10
10
5
5
Source: CB Richard Ellis (formerly CB Commercial Property
Information Systems), Office Vacancy Index of the United
States. Updated through 2014 Q1.
All metropolitan areas (shaded area)
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Regional Perspectives: New York Economic Outlook
0
Commercial Banking
18
June 2, 2014
The Financial Footprint
FINANCIAL SECTOR EMPLOYMENT (PERCENT OF THE RESPECTIVE JOB COUNT)
WHAT THE CHART SHOWS:
 The percentage of employees working in the
14%
US
NY
financial industry in 1999 and today.
New York City
 As expected, the financial industry employs
a significantly higher percentage of the work
12%
force in New York City, than the state, which
in turn employs significantly more than the
10%
national average.
 Nonetheless, the financial sector’s footprint
8%
in the City’s economy has shrunk over the
past decade, to 11.5 percent recently from
6%
13.1 percent in 1999.
4%
KEY MESSAGES:
 The shakeup in the financial industry has
2%
been a significant challenge for New York
City.
0%
1999
Regional Perspectives: New York Economic Outlook
2013
Source: US Department of Labor. Updated through
December 2012 (city and state) and January 2013 (US).
Commercial Banking
19
June 2, 2014
The Financial Footprint
EMPLOYMENT (THOUSANDS), UNLESS NOTED OTHERWISE
WHAT THE TABLE SHOWS:
 The details on employment concentrated in
1999
2013
the financial industry, nationally, for New
York State, and for New York City.
US
 The percentage of the labor force involved in
131,501
135,494
Employment in the financial industry
7,766
7,840
New York State compared with the nation.
Percent of jobs in the financial industry
0.059
0.058
The percentage of folks working in the
Employment
financial activities is significantly higher in
financial industry in New York City is double
the national average.
New York State
Employment
Employment in the financial industry
Percent of jobs in the financial industry
8,674
8,884
746
0.086
674
0.076
KEY MESSAGES:
 The shakeup in the financial industry is a
challenge for New York City.
Source: US Department of Labor. Updated through
December 2012 (city and state) and January 2013 (US).
New York City
Employment
Employment in the financial industry
Percent of jobs in the financial industry
Regional Perspectives: New York Economic Outlook
3,728
3,944
487
433
0.131
0.110
Commercial Banking
20
June 2, 2014
Profitability of Finance
FINANCIAL SECTOR PRE–TAX PROFITS (BILLIONS OF DOLLARS ANNUALLY)
WHAT THE CHART SHOWS:
 Pretax profits earned by the financial
500
500
industry.
 Profits collapsed in the fourth quarter of
400
400
2008 when credit markets froze, but have
rebounded completely since then.
300
300
KEY MESSAGES:
200
200
100
100
0
0
-100
-100
-200
-200
1960
1965
1970
1975
1980
Regional Perspectives: New York Economic Outlook
1985
1990
1995
2000
2005
2010
 Profits of the financial industry exploded in
this decade, likely exaggerated by revenues
associated with the housing boom that is
unlikely to come back any time soon. The
industry remains profitable but bank
regulation could slow overall profits growth
that historically has supported the local
economy.
Source: US Department of Commerce. Updated through
2013 Q3.
Commercial Banking
21
June 2, 2014
… versus all profits …
FINANCIAL SECTOR PRE–TAX PROFITS (PERCENT OF ALL US PROFITS)
WHAT THE CHART SHOWS:
 Pretax profits of the financial sector as a
35%
35%
30%
30%
25%
25%
20%
20%
15%
15%
10%
10%
5%
5%
0%
0%
-5%
-5%
-10%
-10%
-15%
-15%
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
percent of all profits earned by all businesses.
 Profits of the financial industry accounted for
about 15% of all corporate profits prior to the
1990s, 20% during the 1990s, and roughly 30 35% in the last decade. Profits since have
fallen back to less than 25 percent of all profits.
KEY MESSAGES:
 The financial sector was unusually profitable
following the deregulation that began in
earnest in 1980. Some reversion to the past is
likely, with financial industry profits falling back
into the 15-20% range of total corporate profits,
more in the range of the 1990s.
 The structural reversion of financial industry
profits likely will restrain labor compensation as
well in this important segment of the New York
economy.
Source: US Department of Commerce. Updated through
2013 Q3.
Regional Perspectives: New York Economic Outlook
Commercial Banking
22
June 2, 2014
… versus GDP
FINANCIAL SECTOR PRE–TAX PROFITS (PERCENT OF NOMINAL GDP)
WHAT THE CHART SHOWS:
 Pretax profits of the financial sector as a
3.5%
3.5%
percent of nominal GDP.
 Profits of the financial industry were about
3.0%
3.0%
2.5%
2.5%
2.0%
2.0%
1.5%
1.5%
1.0%
1.0%
0.5%
0.5%
0.0%
0.0%
-0.5%
-0.5%
-1.0%
1.5% of GDP prior to the 1990s, 2% during
the 1990s, and reached about 3.0% at the
peak in this decade.
KEY MESSAGES:
 Financial sector profitability likely will settle
back toward 2% of GDP.
Source: US Department of Commerce. Updated through
2013 Q3.
-1.0%
1960
1965
1970
1975
1980
Regional Perspectives: New York Economic Outlook
1985
1990
1995
2000
2005
2010
Commercial Banking
23
June 2, 2014
Financial Sector Employment
EMPLOYMENT (THOUSANDS)
SHARE (PERCENT OF PRIVATE JOBS)
WHAT THE CHART SHOWS:
 Employment in the financial industry (the red
9,000
8,000
8.0%
Employment in financial activities (left scale)
line and the scale is on the left) has fallen
back slightly in recent years and stands
7.5%
about where it was at the beginning of the
New Millennium.
7,000
7.0%
6,000
6.5%
5,000
6.0%
 The shaded zone in the figure above
illustrates the percentage of all jobs that are
in the financial industry. The share has been
edging down since the mid-1980s.
4,000
5.5%
3,000
2,000
KEY MESSAGES:
 The financial industry is highly productive, in
Share of private employment (right scale)
1,000
5.0%
part, a result of waves of consolidation since
the deregulation of the industry in 1980.
4.5%
Source: US Department of Labor. Updated through
0
1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012
Regional Perspectives: New York Economic Outlook
4.0%
February 2014.
Commercial Banking
24
CONTACT:
James E. Glassman
Telephone: (212) 270-0778
jglassman@jpmorgan.com
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