The pace of New York City’s economic growth slowed to 2.7% in the first quarter from the 3.4% in the fourth quarter, according to a report released by Comptroller Scott Stringer on Tuesday.
Stringer’s Quarterly Economic Update found, however, that first quarter growth outpaced the national economy, which expanded by 2.3%. Released every three months, the report tracks the city’s economic health and analyzes its economy in a national context.
“While our economy has been strong, weakening economic growth is a reminder that it won’t continue forever,” Stringer said. “Over the last few years our economy has gone from a sprint to a jog, and now, with signs of a cooling job market and slowing economic growth, we’ve come to a walk.”
Economic indicators showed a mixed economic performance, including a record low unemployment rate, declining commercial leasing activity, and sluggish private sector job growth favoring low- and medium-wage industries.
The analysis found the city added 13,300 jobs in the first three months of the year, an annualized increase of 1.2%, the lowest rate of growth since the fourth quarter of 2016. Of the 13,000 private-sector jobs created this year, 10,900 were in low-wage industries and 4,200 in medium-wage industries. Job gains were offset by a 2,200 job loss in high-wage industries including information and financial services.
While job growth cooled, wages rose as average hourly earnings of all private sector employees in the city climbed 2.3% year-over-year to $35.84.
Despite the weakness in employment growth, the city’s unemployment rate, adjusted for seasonality, fell to 4.3% in the first quarter as the number of jobless fell by 6,700 from the fourth quarter, to 180,400.
The city's personal income tax revenues rose 33.0%, or $1.1 billion, year-over-year to more than $4.4 billion, possibly the highest level on record, the update said. The report cited an increase in both estimated tax payments and withholding, the two main components of PIT revenues. The injection of one-time tax revenues was largely due to changes to the U.S. tax code at the end of 2017. The surge in tax collections isn't expected to last, with a return to more normal levels seen as more likely.
The city has $37.6 billion of general obligation debt outstanding as of March 31. Moody’s Investors Service rates the city’s general obligation bonds Aa2, while S&P Global Ratings and Fitch Ratings rate them AA. All three assign stable outlooks.
The N.Y. MTA’s average weekday ridership fell 4.3% in January and February compared to the same period in 2017. Average weekday bus ridership fell 7.0% and average weekday subway ridership fell 3.3%. During the same period, Long Island Rail Road ridership dropped 2.8% and Metro North ridership declined 1.3%.
“We need discipline today, to prepare for the possibility of tougher times ahead,” Stringer said. “We will continue to monitor the economy’s condition closely, but this quarter’s results highlight the need for prudence in the management of our finances.”