NEW YORK (MNI) – The following is the second and final section of
excerpts from New York Federal Reserve Bank President William Dudley’s
remarks prepared for the Brooklyn Chamber of Commerce Friday, titled
“The Road to Recovery: Brooklyn”:
Regional Economic Conditions
So, how is our region doing? As I mentioned a moment ago, the New
York Fed produces economic indicators to help monitor the performance of
the region. Based on these measures, the downturn in economic activity
in New York City ended in November of 2009. Since then, New York City’s
economy has been on the mend, and our numbers for April show that the
recovery continues at a healthy clip.
Let me turn specifically to employment trends in the region. In
particular, I want to describe our region’s experience during the
recession and recovery. To put this in context, it’s important to relate
our region’s downturn to the nation’s experience.
Nationally, the Great Recession, which began in December 2007, has
been the deepest economic downturn since World War II. When employment
finally bottomed out in February 2010-seven months after the official
end of the recession-the country had lost almost 9 million jobs — a 6
percent drop — and the unemployment rate had more than doubled. In
addition to the millions of people who lost their jobs, many more saw
their hours or income cut, and the duration of unemployment for jobless
workers reached a historical high. For many families, this distress was
compounded by losses of wealth from declining home prices. Since that
low point of employment, job creation has resumed, albeit at a slower
pace than we would like, and unemployment has fallen by about a
percentage point.
As in other parts of the country, employment in our region declined
substantially during the recession. However, employment in New York City
and across much of New York State declined less severely than the
nation. Both the state and city lost less than 4 percent of their jobs.
Part of the reason for the more moderate decline in jobs in New York
during the recession was a less pronounced boom-bust housing cycle.
Indeed, as a percentage, the city lost fewer jobs during this recession
than it did during either of the last two downturns.
Now, as in the nation, a labor market recovery has begun across
much of the region. Over the past year, New York State has added roughly
100,000 private-sector jobs. Within the state, the recovery has been
somewhat uneven. New York City has been gaining jobs for more than a
year now — at roughly the same pace as the nation — and it has
recovered about half of the jobs lost during the downturn.
Conditions in Brooklyn Continuing to drill down geographically, let
me talk in more detail about conditions here in Brooklyn-recognizing
that Brooklyn is a big city and conditions vary neighborhood by
neighborhood.
As you know, if Brooklyn were a city it would rank as the fourth
largest in the nation. The borough’s population is also amazingly
diverse. Over 36 percent of those currently residing in the borough were
born abroad-and that doesn’t even include second generation immigrants.
Significant numbers of residents of the borough were born in the
Caribbean Islands, China, Mexico, Ukraine and Russia.
Brooklyn has a vibrant business community: almost a half-million
jobs are located in the borough. Almost two out of every five jobs are
found in the health care and social assistance sector, and these jobs
represent a wide range of providers including hospitals, outpatient
centers, visiting nurses and child care employees. The borough is also
home to jobs in a diverse set of other industries, including apparel
manufacturing, retail trade, and professional services, not to mention a
number of public and private colleges.
Where do Brooklyn residents work? Many Brooklynites work in
businesses within the borough, in the sectors that I just mentioned.
However, the majority commute to work, primarily in Manhattan (as I did
when I lived here), but also in other boroughs. Thus, the improving job
markets in the city and the region will also help Brooklyn residents.
Now, how did the borough fare during the recent downturn and how is
the recovery proceeding? I will answer this by looking at jobs and at
housing and credit conditions.
With regard to jobs, the news is mixed. On the positive side,
Brooklyn employers held their own during the 2008-09 downturn and have
bounced back well. From peak to trough, the number of jobs located in
Brooklyn shrank by 1 percent, which was not nearly as steep as in New
York City as a whole, and much less severe than the national average.
The recovery in jobs in Brooklyn is proceeding at a healthy pace.
By early 2010, employment in Brooklyn had recouped all its losses and
was setting new highs. Encouragingly, job growth was brisk through the
third quarter of 2010-the latest date for which we have hard figures. By
then, overall employment was up by 5 percent from its low point in early
2009. This jobs recovery is being led by an ongoing expansion in
healthcare, which was little affected by the downturn, as well as
sizeable gains in the leisure and hospitality, retail, and professional
and business services sectors.
—
Conclusion
To sum up, the national economy experienced a soft patch in
activity during the first quarter of 2011 that has spilled over into the
beginning of the second quarter. Nevertheless, the recovery in much of
the region continued at a good pace.
It is very encouraging that Brooklyn’s employers have already added
back enough jobs to replace all those lost during the recession, and
then some. The continued expansion of employment across the nation
should also support economic activity and jobs in Brooklyn.
Yet the regional recovery is still far complete. Brooklyn’s
households continue to have relatively high delinquency rates on their
mortgage and other debt, suggesting continued stress for many of its
residents. Furthermore, despite recent improvements, both nationally and
in Brooklyn, unemployment remains unacceptably high.
Thank you for your kind attention. I will now be happy to answer
some questions.
** Market News International New York Newsroom: 212-669-6430 **
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