"It's a challenging environment, but the data does tell an important story about improvement in the city's economic activity," Sam Chandan, president of Real Estate Econometrics, tells GlobeSt.com.

Overall, "private sector employment was projected to have declined by over 200,000 jobs through August 2009," says the spokesperson from the city's Economic Development Corp. The spokesperson adds that so far, the losses have been below 100,000.

Still, that hasn't slowed the tide of concern surrounding the city's largest economic driver, finance. As spelled out in a June 2009 report from the state's Department of Labor, on an industry basis, financial activities is predicted to experience the largest long-term employment decline of any sector in both the state and city's economies, with professional and business services expected to have the second largest set of losses.

And, despite recent reports that show surprising new profit margins at a few, large and higher-profile Wall Street firms like Goldman Sachs, some experts still predict many of the eliminated jobs at some of the big and small firms simply won't be coming back.<P.According to the New York Fed, since many of the higher income jobs in the finance sector account for around 30% of the city's total wages in a peak year, each job in the city's securities industry is estimated to account for two additional jobs in the city. As an example of the trickle-down impact, Eastern Consolidated reported in September that restaurants in New York City have eliminated 3,400 jobs. A September study from the New York Fed, titled '"Is the Worst Over? Economic Indexes and the Course of the Recession in New York and New Jersey," warns that the downsizing of the area's critical finance sector could pose a major risk to the economic outlook of the entire region going forward, particularly for New York City.

On the ground, all [those indicators] present a pretty simple equation for the Commercial Real Estate office market, according to Studley executive director Howard Nottingham. He tells GlobeSt.com, "If the average space is 250 square feet per person, then you can figure pretty quickly what increasing unemployment does to office space."

As Nottingham notes, this particular downturn's increasing vacancy rate is not the result of over-development as it has been in previous cycles. Instead, he says, it's simply a reduction of the work force.

According to the New York Fed's September report, "headline news stories of New York City's financial sector layoffs in the tens of thousands actually started as early as fall 2007, but those numbers were slow to be reflected in local employment counts." The report says the declines "began showing up in early 2008, and by July 2009, the number of jobs in the sector were down 42,000 from its January peak, with no let up in the pace of the decline."

"There's nothing within our forecast-able time frame that sees us getting back north of 200,000 financial service industry jobs," says New York State Labor Department analyst Jim Brown. Currently, Brown tells GlobeSt.com, "we're at around 160,000 and falling."

He says the city would need to reach a bottom, and then the sector would have to add around 50,000 or more jobs in a financial boom resembling the later part of the 1990s.

In December 2008, the Fiscal Policy Institute said employment in the financial sector--securities, banks and insurance carriers--had been dropping in New York City since late 2007. As of October 2008, financial employment in New York City was 332,700, down 16,900 from a peak in October 2007. That most recent peak, a symptom of the recent expansion still, was still 21,000 less than the previous peak, reached in October 2000.

"There are people who will argue that everything since 2000 has essentially been a giant bear market with intermediate rallies," says Brown.

Brown tells Globest.com that, "Those kinds of flat-out financial booms are rare. You only get those every so often." He adds "you don't get the kind of bounce we had, pretty much starting in the 1980s all the way up until the '90s."

Brown says New York City has been losing share of the national financial services industry for decades. He says that although it grew with New York City, "it was growing faster outside the city.When they talk about us diversifying away from financial services, financial services has been diversifying away from us."

Compared to 10 or 20 years, ago, Brown says, "New York City has a much smaller share, particularly in the securities industry." He says the industry grew faster in other cities, adding there's also been the aspect of firms moving HR and IT operations into northern New Jersey or up the Hudson Valley. Add to that, another trickle-down impact.

"When you get tens of thousands of layoffs, you're getting thousands and thousands of IT professionals and thousands of clerical workers cut as well," he says.

And, some say, talk of Wall Street's pain leads to a sequence of events, where jobs, rents and commercial property values tumble in sequence. Eastern Consolidated chief economist Barbara Byrne Denham tells GlobeSt.com that when people think Wall Street is hurting, it has a snowball effect.

She thinks "losses will continue over the next six to nine months." But, she's points out that in the end, Wall Street could end up leading the city's recovery.

"If other sectors start to add jobs before Wall Street, then so be it," Denham says, adding that the dire warnings about Wall Street's demise have been heard before, most especially in the 1992 downturn.

As for demand for space, Studley's Nottingham says, "there are a number of companies in the market today, who are going from larger to smaller square footage. There are not too many that are currently growing."

Ultimately, Nottingham says he thinks most landlords believe in the drive of Wall Street, and its ability to forever come out with new products, that continue to fuel the Wall Street industry. "They did it with junk bonds, they did it with derivatives, they did it with syndications," he says, adding that this resulted from a number of smart people sitting around, trying to figure out how to make more money.

Of sentiments that financial services was in permanent restructuring, i.e., downsizing mode, Nottingham says he thinks the mood was about the same after Drexel Burnham Lambert went down in the late 1980s. "I'm not quiet as pessimistic as some of the economists are," he says.

More recently, efforts at economic diversification have gained steam capturing the attention of the commercial real estate market. The NYCEDC recently introduced the CRC/Nimble: Small Issuance Bond Program, that offers tax-exempt industrial development bonds as an alternative to traditional bank loans to finance manufacturing equipment and real estate projects.

On Tuesday, the New York City Capital Resource Corp. and the New York City Industrial Development Corp. gave preliminary approvals for financial assistance for two industrial companies to help them remain and grow in the city. According to the EDC spokesman, "without a doubt, our diversification initiatives our an effort to make the local economy less dependent on Wall Street."