At today’s regional economic press briefing, we highlighted some recent softening in the tri-state regional economy (New York, Northern New Jersey, and Fairfield County, Connecticut)—a noteworthy contrast from our briefing a year ago, when economic growth and job creation were fairly brisk. We also showed that Puerto Rico and the U.S. Virgin Islands, which are part of the New York Fed’s district, both continue to face major challenges but have made significant economic progress following the catastrophic hurricanes of 2017.
This softening in regional economic conditions is reflected in a number of trends. Our monthly surveys of businesses in the region have been signaling a significant slowdown in growth in recent months. Furthermore, job growth in virtually every metro area in the region has slowed noticeably over the past year, with little if any employment growth in upstate New York, Northern New Jersey, or Fairfield County. Only in downstate New York has there been any significant job creation during the past year. But even in New York City, in what has been the prime engine of growth in the regional economy throughout this expansion, job creation has slowed.
The housing market has also cooled in and around New York City. With the exception of the Bronx, every single borough and adjacent county has seen significant slowing in home price appreciation. Some of the priciest areas—Manhattan, Brooklyn, and Fairfield County—have seen outright declines in home prices. Interestingly, despite little or no net job growth in upstate New York, housing markets there have been fairly resilient over the past year, as home prices continued to climb at a steady pace in most metro areas and even accelerated in some.
A variety of headwinds, including labor shortages and uncertainty related to trade, have contributed to this economic slowdown. First, labor markets have been tight. Unemployment has been at historically low levels, even in markets where economic growth is sluggish, making it difficult for employers to find workers with the right skills. In fact, in recent months, a majority of both manufacturers and service firms in our region reported difficulty hiring workers due to a lack of qualified candidates. Second, trade issues have had a dampening effect on some regional businesses. According to our August surveys, almost 40 percent of service firms and just over half of manufacturers reported that changes in trade policies had adversely affected their bottom lines. These businesses have tended to give the weakest reports on general business activity in recent months.
Jaison R. Abel is an assistant vice president in the Federal Reserve Bank of New York’s Research and Statistics Group.
Richard Deitz is an assistant vice president in the Bank’s Research and Statistics Group.
How to cite this post:
Jaison R. Abel, Jason Bram, Richard Deitz, and Jonathan Hastings, “Growth Has Slowed across the Region,” Federal Reserve Bank of New York Liberty Street Economics, December 17, 2019, https://libertystreeteconomics.newyorkfed.org/2019/12/growth-has-slowed-across-the-region.html.
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.