NYC’s economy grew 3% in Q1
New York City’s economy grew 3.0% in the first quarter, Comptroller Scott Stringer reported on Monday.
“Growth was fueled by a strong labor market and strong wage growth as measured by average hourly earnings,” the economic update for the first three months of the year said. “The banking sector, a key driver of the city’s economy, continued to perform strongly aided by lower corporate tax rates and deregulation.”
Unemployment stayed close to historic lows, according to the report. NYC’s jobless rate, rising to a seasonally adjusted rose to 4.2% in the first quarter from a record low of 4.0% in the fourth quarter of last year. The number of unemployed in the city increased 8,900 to 173,300 in the first quarter as the labor force dropped 1,100 to 4.1 million.
Job growth in the city cooled off as the city’s private sector added 18,000 jobs, up 1.8% on a seasonally adjusted annualized basis, far less than the 26,900 jobs created in the fourth quarter. Meanwhile, 800 jobs were created in the public sector.
Almost all the new private-sector jobs created were in the local-sector industries, such as education and health services.
Medium-wage industries lost 300 jobs in the first quarter, the first job loss in this sector in over two years, while low-wage industries created 15,700 new private-sector jobs and high-wage industries added 2,600.
Export-sector industries, such as leisure and hospitality and professional and business services, were only 2.0% of the new private-sector jobs. Export sector jobs, which are usually higher paying, provide goods and services to people and firms outside of the five boroughs and depend more heavily on the national and global economies. Local sector jobs provide support for the export sector.
Employment in the financial activities sector declined by 3,100 jobs after it lost 1,500 jobs in the fourth quarter. This sector has been an important driver of economic growth in the city historically and the comptroller said recent job losses there were concerning.
The largest job gains were seen in the health care and social assistance sectors while construction added 2,600 jobs, its biggest increase in two years.
The number of employed residents who may work in the city or the suburbs fell 9,900 to 3.9 million while the city’s employment-to-population ratio dipped to 58.3% from 58.4% in the fourth quarter, which was the highest ratio ever recorded.
While the city’s labor force fell 1,100 in the first quarter, the labor-force-participation rate,which is the ratio of the total labor force to the total non-institutional population aged 16 years old and over, remained unchanged at a record high of 60.9%.