Press Release
New York Fed Presents Update on Regional Economy Highlighting Modest Improvements in Economic Activity and Employment in Manufacturing
July 22, 2010
NEW YORK—The Federal Reserve Bank of New York today presented the region’s latest update on economic conditions and employment trends in the manufacturing sector, which shows modest improvements over the past few months after roughly two years of decline.

Recently, economic activity in New York State, New York City and Puerto Rico appeared to be recovering, while activity in New Jersey remained essentially flat, said New York Fed regional economists at this quarter’s regional economic press briefing. While unemployment rates have improved somewhat in recent months—with private-sector job gains in professional and business services, manufacturing, and leisure and hospitality—they remain at exceptionally high levels.

The manufacturing sector is an important and high-paying industry in the region, and one that has experienced extensive structural changes over the past few decades.

“To date, the manufacturing sector has been a key source of growth during the recovery. After an unusually steep decline from late 2007 to mid-2009, manufacturing output has grown rapidly over the past year, although the level of manufacturing output remains well below the previous peak,” said William C. Dudley, president and chief executive officer of the Federal Reserve Bank of New York. “The importance of manufacturing in the recovery makes it a timely topic for our regional economic briefing,” he added.

Manufacturing employment has been in long-term decline, although output has been generally growing across the region, pointing to significant gains in productivity. More recently, manufacturing employment declined in June after an upturn in April and May in much of New York, New Jersey and Puerto Rico.

New York State (including Fairfield County, CT): New York has experienced modest private-sector job growth in recent months, with growth largely concentrated in the leisure and hospitality, manufacturing, and professional and business services sectors. Job growth has been strongest in and around New York City (including Fairfield County, Connecticut) and in some parts of upstate New York, such as Buffalo and Albany. By contrast, Rochester and Binghamton have experienced some job loss during the past few months.

Results from the New York Fed’s July 2010 Empire State Manufacturing Survey suggest that growth in New York State's manufacturing sector has slowed considerably but not halted. Fewer respondents noted additions to their workforce, but these still outnumber those respondents who are reducing head-counts. Respondents are generally optimistic about employment prospects and the business outlook, but not as optimistic as in the first half of 2010.

Northern New Jersey: New Jersey has experienced recent job growth in a wide range of sectors, with above-average gains in the professional and business services, manufacturing, financial activities, retail and wholesale sectors. All three metropolitan areas in Northern New Jersey—Bergen-Hudson-Passaic, Edison and Newark—have experienced private-sector job growth in recent months.

Puerto Rico: In the Commonwealth, the number of jobs in manufacturing has held steady in recent months, though employment has improved in the professional and business services, wholesale and finance sectors. The construction sector continues to experience significant job losses.

Regional Economic Press Briefing on Manufacturing: Current Trends in the Nation and the District »

Contact:
Jeffrey Smith
(212) 720-6139
(646) 720-6139
jeffrey.smith@ny.frb.org