Community Advisory Group Federal Reserve Bank of New York ... · Net Change in Total Employment, Thousands Source: U.S. Bureau of Labor Statistics (Occupational Employment Statistics)

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Community Advisory Group

Federal Reserve Bank of New York

33 Liberty Street

10F, Paul Volcker Boardroom

Wednesday, April 19, 2017

AGENDA

10:00am Arrival and Continental Breakfast

10:30am Welcome and Adoption of the CAG Charter, Adrian Franco, Officer

10:35am Introductory Remarks, Jack Gutt, Executive Vice President

10:40am-11:10am National Economy Update, Robert Rich, Assistant Vice President

11:10am-11:40am Regional Economy Update, Jaison Abel, Officer

11:40am-12:00pm Community Credit Presentation, Kausar Hamdani, Senior Vice President

& Claire Kramer Mills, Assistant Vice President

12:00pm Adjourn to NWC Room-10F

12:15pm Lunch

12:15pm-1:55pm Round Table Discussion with William Dudley, President &

Michael Strine, First Vice President

1. Presentations on Conditions in Upstate New York by Kate Fish,

ANCA; Michael Martin, NACS; and Stuart Mitchell, PathStone

• What are the major challenges that your constituencies face

in achieving financial security in Upstate New York?

• Are there any unique geographic factors that cause barriers

to sustainable employment?

• Are these challenges persistent or have they been

exacerbated due to specific or recent economic changes?

• How do you see these issues/challenges evolving in the

next year and in the long-run?

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2. Discussion on Conditions in the Second District by CAG

Membership: What are the most pressing socio-economic issues

facing the community you serve? In other words, what are your

constituents talking about?

(Please discuss the below topics that are most relevant to your

scope of work)

• Sustainable employment and skills/location mismatch

• Access to financial services

• Affordable housing

2:00 pm Adjourn

Regional Economic Conditions

Jaison R. Abel, Research Officer

Community Advisory Group Meeting – April 19, 2017

The views expressed here are those of the presenter and do not necessarily represent

those of the Federal Reserve Bank of New York or the Federal Reserve System.

The 2nd Federal Reserve District Regions in the District

FEDERAL RESERVE BANK OF NEW YORK

Upstate

Northern NJ

Downstate

1

Puerto Rico &

U.S. Virgin Islands

Overview of Regional Conditions

• Regional economic conditions have improved noticeably

in recent months, particularly in the manufacturing sector.

• Job growth has been strongest in and around New York

City, while growth in upstate New York and northern New

Jersey has been slower. Puerto Rico continues to lose

jobs.

• Middle-wage jobs have finally started to return, though to

different degrees across the region.

FEDERAL RESERVE BANK OF NEW YORK 2

Current Economic Conditions FRBNY Regional Business Surveys

Source: Federal Reserve Bank of New York. 3

-60

-40

-20

0

20

40

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Business Leaders Survey

(Service Sector)

Empire State Manufacturing

Survey

Apr

Diffusion Index

Shading indicates NBER recession

Current Business Climate FRBNY Business Leaders Survey

Source: Federal Reserve Bank of New York. 4

-100

-75

-50

-25

0

25

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Apr

Diffusion Index


Current Climate (Business Leaders Survey)

Regional Employment Trends Indexes of Total Employment, Seasonally Adjusted

Source: Bureau of Labor Statistics and Moody’s Economy.com. 5

85

90

95

100

105

110

115

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Upstate Metros

Downstate NY

Puerto Rico

United States

Northern NJ

Index (December 2007 = 100)


+1.8%

+1.7%

+0.9%

12-Month Percent

Change

-0.9%

+1.5%

Feb

Dashed Line Indicates

U.S. Employment Trough

(February 2010)

Recent Job Growth in the Region Annual Percent Change, February 2017

6

Strong Growth

Moderate Growth

Modest Growth

Little or No Growth

Declining Glens Falls

Elmira Binghamton

Kingston

Buffalo Rochester Syracuse

Utica

Albany

Ithaca

NYC

Watertown

Du

tch

ess

- P

utn

am

North Country

Source: Bureau of Labor Statistics and Moody’s Economy.com.

Note: Orange*, Bergen*, and Middlesex* are the

Orange-Rockland-Westchester, Bergen-Hudson-Passaic,

and Middlesex-Monmouth-Ocean Special BLS Areas.

Orange*

Middlesex*

Newark

Job Categories Based on 2015 Median Wages, United States

Source: U.S. Bureau of Labor Statistics (Occupational Employment Statistics).

Management Computer & Math

Legal Engineering

Business & Finance Healthcare Practitioners

Sciences

Education Arts & Entertainment Installation & Repair

Construction Social Services

Protective Services Administrative Support

Production Transportation

Healthcare Support Sales

Building Maintenance Personal Care

Farming Food Preparation

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

50% 20% 30% Higher Wage Middle Wage Lower Wage

7

Job Gains and Losses in the United States Net Change in Total Employment, Thousands

8 Source: U.S. Bureau of Labor Statistics (Occupational Employment Statistics).

-8,000

-6,000

-4,000

-2,000

0

2,000

4,000

2,104 2,372

-6,550

1,205

3,093

-985

2,184 2,346

2007 to 2010 2013 to 2016 2010 to 2013

278

Thousands

Higher Wage

Lower Wage

Middle Wage

Higher Wage

Higher Wage

Middle Wage

Middle Wage

Lower Wage

Lower Wage

Middle-Wage Jobs Returning

• Growth in traditional blue collar jobs:

Construction

Production

Transportation

Installation & Repair

• Education jobs growing again as local government fiscal

pressures have subsided.

• Rebound in Administrative Support jobs.

FEDERAL RESERVE BANK OF NEW YORK 9

Job Gains and Losses in the Region Net Change in Total Employment, Thousands


102

18

144

-125

0

125

250

182 203

178

38 49 47

27 7 17

-60

0

60

120

Downstate NY: 2013-2016

New Jersey: 2013-2016

Downstate NY: 2010-2013

New Jersey: 2010-2013

Higher Middle Lower

Higher Middle Lower

Higher Middle Lower

Higher Middle Lower

Job Gains and Losses in the Region Net Change in Total Employment, Thousands


6

-45

-5

2

-29

14

-50

-25

0

25

21

6

25

15

-25

22

-30

-15

0

15

30 Upstate NY: 2010-2013

Puerto Rico: 2010-2013

Upstate NY: 2013-2016

Puerto Rico: 2013-2016

Higher

Middle

Lower

Higher

Middle

Lower

Higher Middle Lower

Higher

Middle Lower

A Shrinking Middle Share of Jobs by Wage Group, 2007 and 2016

Source: U.S. Bureau of Labor Statistics (Occupational Employment Statistics).

0%

20%

40%

60%

80%

100%

28% 30% 27% 29% 27% 28% 25%

28%

50% 46% 54% 49% 52% 49% 60% 53%

22% 23% 20% 22% 21% 23%

16% 19%

28% 29%

52% 48%

20% 22% Higher

Wage

Middle

Wage

Lower

Wage

2007 2016

Downstate 2007 2016

Upstate 2007 2016

New Jersey 2007 2016

Puerto Rico 2007 2016

United States

NYS Minimum Wage Increase 2017 Through 2022

Source: New York State Government. 13

$8

$9

$10

$11

$12

$13

$14

$15

$16

2016 2017 2018 2019 2020 2021 2022

Long Island & Westchester

New York City Large Employers

(11+ Workers)

Upstate New York

New York City Small Employers

(<11 Workers)

(To $15)

Effects of NYS Minimum Wage Increase FRBNY Supplemental Survey Report, March 2017

Source: Federal Reserve Bank of New York.

Q: Has the recent increase in the minimum wage, effective January 1, had any effect on your decisions about compensation and employment?

36%

34%

14%

16%

51%

17%

15%

17%

No Effect

Small Effect

Moderate Effect

Significant Effect

Empire State Manufacturing Survey

Business Leaders Survey

14

US Macro Overview April 19, 2017

Real consumer spending fell for a second consecutive

month in February, suggesting a marked slowdown in

real PCE growth in Q1 compared to recent quarters.

− Weak consumer spending in 2017 likely reflects some effect

from the delay in tax refund disbursements.

February data suggested some improvement in the near-

term outlook for business equipment spending, and

single-family housing starts continued to trend upward at

a moderate rate.

Surveys continued to indicate sizable improvement in

manufacturing conditions, with production data showing

tentative signs of a sustained rebound in sectorial activity.

Payroll growth was weak in March due to weather

impacting the reported numbers, but other indicators

pointed to ongoing improvement in the labor market.

− The unemployment rate fell, the employment-population

ratio rose, and the labor force participation rate held steady

in the month.

February price data suggest headline inflation is close to

the FOMC’s objective, while core inflation still appears to

be running modestly below the objective.

U.S. equity indexes and nominal long-term Treasury

yields moved lower. Oil prices retraced part of the decline

that occurred during the first part of March, while the

dollar moved lower against most major currencies.

-10

-8

-6

-4

-2

0

2

4

6

8

10

-10

-8

-6

-4

-2

0

2

4

6

8

10

2000 2002 2004 2006 2008 2010 2012 2014 2016

2016Q4 growth revised up – divergent views for 2017Q1

% Change – Annual Rate

Source: Bureau of Economic Analysis via Haver Analytics

% Change – Annual Rate

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

1950 1960 1970 1980 1990 2000 2010

Very weak productivity growth since 2010 20-Qtr MA of 1 Quarter

% Change — Annual Rate

Source: Bureau of Labor Statistics Note: Shading shows NBER recessions.

Output Per Hour

(Nonfarm business sector)

20-Qtr MA of 1 Quarter

% Change — Annual Rate

-6

-4

-2

0

2

4

6

8

-6

-4

-2

0

2

4

6

8

2000 2002 2004 2006 2008 2010 2012 2014 2016

Consumer spending in 2017 retreats from Q4 pace

12 Month % Change 12 Month % Change

Source: Bureau of Economic Analysis,

Federal Reserve Board via Haver Analytics Note: Shading shows NBER recessions.

Real Personal

Consumption

Real

Disposable

Income

0

20

40

60

80

100

120

140

160

0

20

40

60

80

100

120

140

160

2000 2002 2004 2006 2008 2010 2012 2014 2016

Consumer confidence at or near multi-year high

Index Index

Source: Conference Board,

University of Michigan Note: Shading shows NBER recessions.

Conference

Board

Michigan

Survey

-30

-20

-10

0

10

20

30

-30

-20

-10

0

10

20

30

1980 1985 1990 1995 2000 2005 2010 2015

4 Quarter % Change 4 Quarter % Change

Source: Bureau of Economic Analysis,

Federal Reserve Board via Haver Analytics Note: Shading shows NBER recessions.

Real Business

Investment in New

Equipment

Investment in equipment rose modestly in Q4

58

60

62

64

66

2

4

6

8

10

12

2006 2008 2010 2012 2014 2016

Labor market conditions continue to strengthen

Percent Percent

Source: Bureau of Labor Statistics

via Haver Analytics

Note: Shading shows NBER recessions.

Unemployment Rate

(Left Axis)

Labor Force

Participation Rate

(Right Axis)

Employment to

Population Ratio

(Right Axis)

0

1

2

3

4

0

1

2

3

4

2007 2009 2011 2013 2015 2017

Annual % change Annual % change

Source: Bureau of Labor Statistics

via Haver Analytics

Note: Shading shows NBER recessions.

Average Hourly

Earnings

Employment

Cost Index

Mixed evidence of stronger labor compensation growth

-2

-1

0

1

2

3

4

5

-2

-1

0

1

2

3

4

5

2000 2002 2004 2006 2008 2010 2012 2014 2016

12 Month % Change 12 Month % Change

Source: Bureau of Economic Analysis

via Haver Analytics Note: Shading shows NBER recessions.

Total PCE

Core PCE

FOMC Objective

Headline inflation is close to the FOMC’s 2% objective

Documents

Community Advisory Group Federal Reserve Bank of New York ... · Net Change in Total Employment, Thousands Source: U.S. Bureau of Labor Statistics (Occupational Employment Statistics)