Stringer Says City Should Take Advantage of Strong Economy
Fewer than half of new private-sector jobs created in the second quarter were in lower-wage industries, as high-wage industries added 6,000 new jobs—the biggest gain in that sector in the last two years.
NEW YORK CITY—The New York City gross domestic product rose a moderate 2.7% in the second quarter, which helped fuel the lowest unemployment rate on record of 4.2%.
The GDP growth was the same as the 2.7% rate posted in the first quarter of this year, but lower than the 3.4% registered in the fourth quarter of 2017. The city’s unemployment rate fell from 4.3% in the first quarter. Most second quarter economic metrics were higher or still strong, according to a report released by New York City Comptroller Scott Stringer on Monday.
A plus for the de Blasio administration was that private-sector job growth accelerated in the second quarter, adding 13,800 new jobs during the three-month period. Fewer than half of new private-sector jobs created in the second quarter were in lower-wage industries, as high-wage industries added 6,000 new jobs—the biggest gain in that sector in the last two years.
“We must take advantage of our city’s strong economy now, and set the foundation for long-term growth that lifts everyone up—that means linking local residents with good-paying local jobs, bold ideas to make housing more affordable, and thinking outside the box on issues from childcare to transportation,” Stringer says.
Stringer adds that while the job numbers are strong, there are potential headwinds on the horizon, including rising federal deficits and possible trade wars.
All five boroughs experienced their lowest second quarter levels on record, as the unemployment rate dropped to: 3.4% in Queens; 3.5% in Manhattan; 3.9% in Staten Island; 4.0% in Brooklyn and 5.3% in the Bronx. The number of employed city residents increased by 2,400 in in the second quarter to a record high of 4,049,200.
The real estate sector produced mixed results in the second quarter. New commercial leasing activity in Manhattan increased 16.7% to 9.1 million square feet in the second quarter—the highest second-quarter level since 2011.Vacancy rates (9.2%) and average rents remained basically flat ($72.62-per-square-foot) compared with a year ago.
The report states that Downtown commercial rents rose to a record high of $62.09-per-square-foot because of more expensive space coming online at Three World Trade Center and at Pier 17.
The residential housing market continued to soften, according to the quarterly report. Home prices in Manhattan, as measured by the average sales price and average price per square foot, fell on a year-over-year basis for the fourth consecutive quarter after nine consecutive quarters of year-over-year growth. The average sale price in Manhattan fell 4.5% in the second quarter as compared to a year earlier to $2,090,567. The number of Manhattan sales also declined for the third consecutive quarter, falling 16.6% to 2,629, which caused an increase in listing inventories.
The number of home sales also fell in Brooklyn (5.7%) and in Queens (6.5%) on a year-over-year basis. The average sales price in Brooklyn fell 1.4% to $984,047, while the average sales price in Queens rose 7.6% to $629,869.
Other notable economic data culled from the report include:
• Private-sector hiring grew at an annual rate of 1.4% in the second quarter of this year.
• Of the 13,800 private-sector jobs added in the second quarter, 6,300 were in low-wage industries; 1,600 were in medium-wage industries and 6,000 were in high-wage industries.
• Private-sector job gains included 7,700 new jobs in health care and social assistance.
• Housing-related sectors, including construction and other real estate and property workers, lost 1,900 jobs in the second quarter, the biggest decline since the first quarter of 2010.
• Government employment fell by 1,200 jobs.
• Average hourly earnings of all private New York City employees rose 2.5% in the second quarter as compared to the same period last year, slightly lower than the U.S. growth rate of 2.7%.
• Personal income taxes withheld from paychecks, an indicator of income levels, rose 11.8% the second quarter as compared to the same time last year, which the report notes reflect wage growth as well as a potential rise in one-time bonuses.
• Total venture capital investment in the New York metro area fell 1.7% in the second quarter as compared to the same period last year to $2.8 billion. However, the number of venture capital deals in the New York metro area rose to 193, from 186 in the same period last year.