Economic Research & Analysis

April 2017 Economic Snapshot

Highlights

In addition to moderate job growth, unemployment reached a record low in March 2017.
The value of venture capital financings fell in the first quarter of 2017 while deal activity rose.
Residential rents and home prices continued to diverge in March 2017 with rents unchanged from last year and home prices rising.
Airport passenger volume continued to rise in February 2017.

Archive

Audio Resources

PODCAST

#84: NYC Ferry Sets Sail + Unemployment Sinks to Record Low

Simon and Andrew review the state of private sector employment in April 2017 and are joined by special guest Anthony Hogrebe to explore the economic impact of NYC Ferry – the new public transportation option launching Monday, May 1.

Video

Employment

Private sector employment rebounded in March 2017. After falling by 7,200 jobs in February 2017, private sector employment grew by 6,300 jobs last month. Employment gains were distributed relatively evenly across the private sector. Accommodation and Food Services led gains by adding 2,600 jobs. This was followed by Retail and Finance and Insurance, though employment in the latter remains below 2016 totals. Job losses were led by Wholesale Trade, which lost 1,200 jobs, followed by Administrative Services and Health Care and Social Assistance. 

The unemployment rate continued to fall, hitting a record low for the third consecutive month. The rate dropped from 4.3% in February 2017 to 4.0% this month. At the same time last year, the city’s unemployment was 5.2%. By comparison, unemployment is 4.3% for New York State and 4.5% for the US. This drop comes as labor force participation ticked up 0.5 percentage points from last month to 60.7%. Despite very low unemployment, wage growth remains depressed. After adjusting for inflation, wages in March 2017 were 0.26% lower than the previous year. 

Monthly employment data are seasonally adjusted by OMB. 

Sources: New York State Department of Labor; US Bureau of Labor Statistics

April 2017 Snapshot - Employment by IndustrySource: New York State Department of Labor

March 2017 Snapshot - Employment by Metro Region

Source: U.S. Bureau of Labor Statistics

Finance

NYCEDC monitors New York City’s gross city product, venture capital financing, and the New York Federal Reserve Bank’s Index of Coincident Economic Indicators, each of which are reported on a quarterly basis. This month, we are reporting venture capital data from CB Insights/PwC. 

Venture capital financings in the New York metropolitan area fell to two-year lows in the first quarter of 2017. Nevertheless, deal levels rose from the prior quarter. While deal levels remained relatively steady from 2016 averages, financing values fell considerably, indicating smaller deals on average. The New York metropolitan area’s deal activity remained second only to Silicon Valley; however, the value of financings slipped below that of New England to third highest in the US for the first time since Q2 2015. WeWork, a commercial real estate company, raised $300 million to make it the city’s largest venture capital deal for the second straight quarter. 

Note: The CEI is used by the New York Federal Reserve to capture economic activity in a single number, and is constructed from four data series: payroll employment, unemployment rate, average weekly hours worked in manufacturing, and real (inflation-adjusted) earnings.
Source: Federal Reserve Bank of New York; Federal Reserve Bank of St. Louis

Real Estate

Residential rental and sales markets in New York City continued to diverge in March 2017. Median monthly rent prices were $2,300, unchanged from March 2016. This is the fifth consecutive month that rent prices have not increased from their prior year levels. This rent stagnation is unprecedented (since at least 2011, the earliest year for which this dataset is available). Meanwhile, median home sales prices continued to increase, hitting $650,000 in March 2017, up 12.9% from the prior year. This continues a twenty-one-month trend of rising home price inflation. 

Office markets were down in March 2017, relative to last year. Average rents per square foot in Class A office buildings (top-market commercial spaces) fell 1.6%, while the vacancy rate rose 0.6 percentage points to 9.4%. The Downtown market led falling prices, although vacancy rates Downtown are at their lowest levels since 2013, contradictory to the typically inverse relationship between prices and vacancy. Conversely, in Midtown South, brisk price increases have coincided with rising vacancies. 

April 2017 Snapshot

April 2017 Snapshot

Sources: Zillow; Cushman & Wakefield

Transit & Tourism

Ridership on local transit systems fell across the board in February 2017 with subways and buses leading declines. This continues a slump in subway ridership and brings monthly totals to the lowest levels in the last three years. Ridership on commuter rail and bridges and tunnels also dropped in February 2017. This was the first decline in automotive traffic (measured by bridges and tunnels tallies) in three years. Led by the increasing numbers of domestic passengers, airport traffic continued to rise in February 2017. This comes as the number of flights fell, indicating fuller flights on average. While Broadway attendance declines were much greater (-17.8%), revenue was balanced by higher ticket prices, which rose from $97 on average in February 2016 to $113 this year.

Sources: Port Authority or New York and New Jersey; Metropolitan Transportation Authority; Broadway League; CBRE

Transit Change Compared to 2016

April 2017 Snapshot - Transit

Tourism Change Compared to 2016

April 2017 Snapshot - Tourism