The Federal Reserve Bank of New York works to promote sound and well-functioning financial systems and markets through its provision of industry and payment services, advancement of infrastructure reform in key markets and training and educational support to international institutions.
Regional & Community Outreach connects the Bank to Main Street via structured dialogues and two-way conversations on small business, mortgages, and household credit.
Economic Education improves public knowledge about the Federal Reserve System, monetary policy implementation, and promoting financial stability through the Museum and programs for K-16 students and educators, and the community.
The Federal Reserve Bank of New York’s monthly surveys of manufacturers and service-sector firms include special supplementary questions on topics of interest. The August survey questions focused on the effects of the Affordable Care Act (ACA) on businesses in the District, and how, if at all, firms are making changes in response to it.
An Update on the Competitiveness of Puerto Rico’s Economy, released today, offers six steps that the Island’s government should consider taking to restore its fiscal health. Puerto Rico faces interrelated economic and fiscal challenges. The report characterizes economic activity in Puerto Rico as flat at a depressed level and shows that public debt has risen to about 100 percent of GNP, a high ratio compared with the ratios for U.S. mainland states and a number of foreign economies. Besides the weak economy, the main sources of the debt buildup have been increasing general government deficits; debt incurred by COFINA, a special-purpose bond issuing entity; and rising deficits in a group of public-sector corporations that provide a variety of services on the Island, including electricity, water, and transportation. A series of ratings downgrades eventually pushed the credit ratings on the Island’s debt below investment grade in early 2014, and it has become increasingly evident that fiscal and economic reforms will be needed in order to maintain access to capital markets on a sustainable basis.
The July 2014 Empire State Manufacturing Survey, released today, points to some notable strengthening in New York’s manufacturing sector. The survey’s headline general business conditions index and the new orders and shipments indexes all climbed to their highest levels in more than four years. The employment measure also moved up in July and is close to the three-year high set in April. Because the survey’s diffusion indexes measure the breadth of change for their respective indicators, greater values tend to indicate not just higher levels of activity, but also a faster pace of growth, so today’s report is quite encouraging. This month’s Empire Survey suggests a fundamental improvement in New York State’s manufacturing climate that has now persisted for three months—a break from the winter doldrums of February, March, and April, when there were few signs of any growth at all. Some of the improvement over the past few months may reflect a bounce-back from the weak winter, but we are now getting past the point where this is likely to be the predominant factor. This provides a hopeful sign that we may see some of these positive trends reflected in hard data on statewide manufacturing employment, which looked quite weak during the first part of 2014.
With more than 35,000 farms and $5.5 billion in annual sales, the agriculture industry is an important part of the New York State economy. New York produces a wide array of agricultural goods, from dairy products (the state has the third largest dairy industry in the country) to fruits and vegetables, livestock, and even fish. It is also a growing industry: agricultural exports, for example, have more than doubled in the state since 2000. And the action isn’t just on farms: agriculture reaches into many other parts of the economy, such as farmers’ markets, food manufacturing and processing firms, restaurants, and agritourism.
Recognizing that firms that make, process, and sell agricultural products play an important role in the state’s economy, the Regional and Community Outreach team at the New York Fed recently held a conference for N.Y. food and beverage firms on accessing capital, co-sponsored by Empire State Development and the New York State Department of Agriculture and Markets. The goal of the event, which was held on June 24, was to provide information about the wide array of financing available for these firms, and to help them decide which types of financing would best suit their credit needs. The conference also highlighted opportunities in international markets, and identified financing tools available to assist firms with exporting their goods abroad.
At today’s regional economic press briefing, we provided an update on economic conditions in New York, northern New Jersey, and Puerto Rico, with a special focus on the kinds of jobs that have been created in each of these places during the recovery. Led by New York City, economic activity has continued to expand in most parts of the region. As a result, a growing number of places have now gained back, or are close to gaining back, all of the jobs that were lost during the Great Recession. That said, not all the news was positive. Economic conditions appear to have weakened somewhat in northern New Jersey during the first few months of 2014, in part due to the harsh winter weather earlier this year. And a few places remain very weak. In particular, Binghamton, Elmira, Utica, and Puerto Rico have yet to see any meaningful jobs recovery.
The Federal Reserve Bank of New York’s monthly business surveys include special supplementary questions on topics of interest. April’s survey questions focused on how difficult it has been for firms in the region to find and retain workers with basic skills, such as math and English, as well as advanced computer skills and “soft skills,” such as punctuality and interpersonal skills. Overall, the level of difficulty finding workers has not changed much since April of last year, when these questions were previously asked. Workers with advanced computer skills were the hardest to find, for both manufacturing and service firms. Manufacturers report much more difficulty than service firms in finding people with basic English, computer, and especially math skills, and even seem to be having difficulty in finding workers that are simply punctual and reliable. Service firms say they’ve had particular trouble finding candidates with good interpersonal skills. These findings suggest that although the job market recovery remains tepid, demand for workers with particular skills is still significant.
The New York Fed’s latest Beige Book report indicates that harsh winter weather hampered economic activity in the region in early 2014.
Eight times a year, each of the nation’s twelve Federal Reserve Banks produces a report on current economic conditions in its District, based largely on anecdotal information obtained from regional business contacts. The New York Fed’s report covers New York State, northern New Jersey, and southwestern Connecticut. The twelve District reports are combined with a national summary to produce what’s come to be known as the Beige Book—a report that provides some of the most timely information available on economic conditions.
Puerto Rico’s economy has been in a protracted economic slump since 2006. If there were officially designated recessions for the Commonwealth, it probably would have been in one for the better part of these past seven years. Real GNP had fallen 12 percent before finally leveling off in 2012. But the economic measure most widely relied upon to gauge the island’s economy—because the data are monthly and timely—is payroll employment. Between early 2006 and the first half of 2011, this measure fell by a similar amount (13 percent); it then started to recover gradually in late 2011 and into the first part of 2012. But late in the year it began to nosedive again, reaching new lows in mid-2013—Or did it? More complete tabulations of employment presage upward revisions to Puerto Rico’s payroll job count, suggesting that current employment (and thus economic) conditions are not as gloomy as they appear, based on currently reported data.
Today, the Federal Reserve Bank of New York begins releasing its monthly survey of regional business activity, called the Business Leaders Survey. This survey is a close cousin of our Empire State Manufacturing Survey, with some differences. The Business Leaders Survey covers the service sector rather than the manufacturing sector, and its respondents come from New York, northern New Jersey, and southwestern Connecticut, instead of just New York State. This new monthly release will provide another timely regional indicator to help gauge both local and national business cycles, and it will be available well before hard economic data on the region from other sources become available. In this post, we show that data from the survey, which have been collected monthly since 2004, provided some early signals about the most recent recession and recovery, at both the national and regional levels. The January 2014 survey points to continued modest growth in service-sector activity in the region, coupled with increasingly widespread optimism about future conditions.
Fairfield County, comprising the southwestern corner of Connecticut, is sometimes thought of as an affluent “bedroom community” outside New York City—a place filled with commuters taking home large paychecks. On average, it’s indeed one of the most affluent counties in the United States, with a median household income of $80,000. Yet a fairly small minority of working residents—fewer than one in ten—actually commutes to the Big Apple. Fairfield County has a sizable industry base of its own. In particular, the finance industry, based largely in Stamford and Greenwich, accounts for a disproportionately large 9 percent of the county’s employment and generates 27 percent of aggregate income. These proportions aren’t only well above the respective nationwide averages, but are even slightly higher than they are for New York City. Fairfield is also a major hub for corporate headquarters: The proportion of jobs in management of companies is more than twice the nationwide average and, again, higher than it is for New York City. Manufacturing (largely aircraft) is also somewhat prevalent, though not nearly to the same extent it was a couple of decades ago: It’s fallen by more than half since 1990. An economic and demographic profile of Fairfield County can be found on our District Profile page.
A Tale of Two Cities While Fairfield County’s average income is among the highest in the nation, so is the degree of income inequality in the county. To illustrate this, let’s consider the two largest cities: Stamford and Bridgeport. Stamford’s median household income, at $76,000, is again half as high as the nation’s. Similarly, its poverty rate is well below the nation’s, and a whopping 43 percent of adults hold college degrees. In contrast, Bridgeport’s median income is $38,000 (half of Stamford’s) and its poverty rate is double that of Stamford’s. Just 15 percent of adult residents hold college degrees—barely more than half the U.S. average and just over a third of Stamford’s rate. Quality-of-life measures show similar differences: The overall crime rate in Bridgeport is roughly three times as high as in Stamford, and its violent crime rate is roughly quadruple Stamford’s.
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