Ever since the national economic recovery began, New York City has been one of the best-performing metropolitan areas in the nation. The City recovered earlier and faster than most of the nation.
Since February 2010, when national employment reached a bottom, payrolls in the U.S. have increased by a total of 4.8 percent. During that same time, employment in New York City has increased about 7.2 percent. By early 2012, employment in New York City reached an all-time high, and it has continued to grow since then. But the pattern and sources of growth have changed during the recovery as the local economy responded to global economic shifts.
In the first two years of the recovery, employment in New York City grew much more rapidly than it did elsewhere. In the 12 months from December 2009 to December 2010, payroll employment in the city grew more than twice as fast as the national average. In 2011, the growth rate was 50 percent faster. But in 2012, the city’s employment growth edge fell to a couple of tenths of one percent. This pattern has persisted in the first four months of 2013, as New York City’s payroll employment growth has been modestly higher than the nation’s.
New York has come back to earth, as it were, largely because of weakness in the financial services sector. Employment in financial services has been an important contributor to growth during the past three decades. In both the late 1990s and mid 2000s, employment in financial services grew substantially, and this growth coincided with major surges in total employment. However, in the current expansion, after an initial increase, employment in financial services has been declining since mid-2011, when the Eurozone and U.S. fiscal stresses emerged. Today there are 6,600 fewer jobs in financial services in New York City than there were in August 2011.
Fortunately, healthy growth in creative and technology industries—as well as those related to tourism, education and health care—have offset the weakness in the financial sector and kept payrolls in the local economy rising slightly faster than in the rest of the nation.
The fact that New York City employment continues to expand faster than the nation’s with the financial sector sidelined can be seen as a positive. If the city is doing this well with employment in the financial sector down, it will only improve when the that sector begins to grow again, as it inevitably will.