Jaison R. Abel and Jason Bram
The New York Fed’s latest Beige Book report points to continued moderate growth in the regional economy. Eight times a year, each of the nation’s twelve Federal Reserve Banks produces a report on current economic conditions in its District, based on largely anecdotal information obtained from a variety of 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 is known as the Beige Book—a document that provides some of the most timely information available on economic conditions.
The New York Fed report—based on information collected through May 24—was generally positive. Real estate conditions continue to improve in the region. With low inventories in many of the region’s housing markets, bidding wars have become increasingly common, and prices have risen noticeably across parts of New York State. While home values have increased steadily in northern New Jersey as well, a sizable overhang of distressed properties has continued to restrain price appreciation in this area. Apartment rents in and around New York City continue to rise briskly. Commercial real estate markets across the region have also shown signs of improvement so far this year.
Job prospects in the region have also improved. While employment in the manufacturing sector has remained flat, more and more business contacts in other sectors say they’re adding workers—especially in fields such as information technology, auditing, and compliance. With qualified job candidates increasingly hard to find, some employers are becoming more negotiable on salary, though most are still said to be holding the line on compensation.
Retailers say activity was sluggish in April, in large part due to cold weather, but sales picked up quite a bit in May. In addition, new automobile sales have been quite robust recently, running well ahead of year-ago levels. Regional banks also report some encouraging news: demand is up for almost all types of loans. Moreover, as has been the case for some time now, bankers continue to report widespread declines in delinquency rates on all types of loans.
Overall, the latest New York Fed Beige Book report suggests that the region is continuing to grow at a moderate pace. Whether the pace of growth will pick up or be constrained by the fiscal contraction that occurred earlier in the year remains to be seen. The next report, to be released on July 17, should provide more information on the region’s path of recovery.
The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.
Jaison R. Abel is a senior economist in the Research and Statistics Group of the Federal Reserve Bank of New York.
Jason Bram is a senior economist in the Group.