Economic Research & Analysis

May 2012 Economic Snapshot

Inside this Volume

Private employment rose by 12,600 in March after an increase of 9,600 jobs in February.
The unemployment rate rose to 9.7 percent in March from 9.6 percent in February.
The Manhattan hotel occupancy rate in March 2012 was 87.3 percent, up from 84.1 percent in March 2011.
The Manhattan Class A office vacancy rate was 8.3 percent in April 2012, while the average asking rent was $69 PSF.
Passengers in NYC area airports totaled 7.3 million in February 2012, up 9.9 percent from February 2011.

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#28 Demographics of the Information Era

NYCEDC explores the income of individuals under the age of 25 in the Information Era.

Employment

  • Private sector jobs in New York City rose by 12,600 in March after an increase of 9,600 in February.
  • In the same period, government jobs in the City fell by 1,600 resulting in a net increase of 11,000 total private and public sector jobs.
  • Since March 2011, private sector employment has risen by 68,700 jobs or 2.1 percent.
  • The City’s unemployment rate rose to 9.7 percent in March from 9.6 percent in February.
  • Between February and March, the number of employed City residents fell by 6,300 and the number of unemployed City residents rose by 6,900.

Is 20 the New 30? The Demographics of the Information Era and the Increase in Household Income Among the Very Young

  • The upcoming IPO of Facebook and its recent acquisition of Instagram have helped to increase focus on young entrepreneurs. Successful entrepreneurs in the internet and information era tend to be very young (often not even in their 30s), which contrasts from those of the industrial era. For instance, Mark Zuckerberg was 19 years old when he launched Facebook, but Henry Ford was well into his 40s when he introduced the Model T in 1908 and George Eastman was in his 30s when he patented the first film in roll form.
  • While it is difficult to measure the number of entrepreneurs by age in the workforce, household income can be used as a proxy to gauge whether or not more people are becoming successful at a relatively young age. Ten years ago, many professionals reached high income levels in their 30s. More recently, a larger percentage of very young households (under 25 years of age) are earning very high incomes.1 Thus, household income has increased not only for 20-something entrepreneurs who found new companies, but also for the young professionals who work at those firms and in other high wage-paying sectors.
  • The share of all households in the nation under age 25 that have income exceeding $100,000 has more than doubled – from 5.0 percent in 2000 to 11.8 percent in 2011.2 These shares are considerably higher in areas with booming tech sectors like Manhattan and San Francisco, where more than 25 percent of all young households reported incomes greater than $100,000 in 2011. These shares were up from 18.6 percent and 20.9 percent in 2000, respectively.
  • Details on household income by industry for these young households are obtained from the American Community Survey. In Manhattan, young households employed in the Finance and Insurance industry earn more than in any other industry when measured both in terms of median wages and the top 10 percent of the pay scale. The same is true in San Francisco, where young households that compose the top 10% of earners in the Finance and Insurance industry actually earn more than their counterparts in Manhattan.3
  • The increase in the share of households under age 25 with incomes of over $100,000 has other implications, too. It could point towards a rise in non-related roommates living together, who are considered households by the Census Bureau. However, this is another sign of a changing world in the internet and information era. Facebook itself experienced rapid growth when its founder moved cross country and invited his developers to work together at his house in Palo Alto.

1 Household age is based on the head of household designation. Young individuals who are living with at least one parent at home are not counted as households as their parent is still considered the head.
2 Inflation-adjusted. The percentages reported for 2000 are approximations. They reflect the percentage of households earning $75,000 or more in 2000, which equates to those earning $98,390 or more in 2011 dollars after adjusting for inflation using the Consumer Price Index for Urban Wage Earners and Clerical Workers as reported by the U.S. Bureau of Labor Statistics.
3 For both geographies and nationally, medical professionals, who require long years of schooling, are not heavily represented in the 25 and under age group.

Chart 1

Chart 2

Real Estate and Construction

Manhattan Office Market

  • In April 2012, both the Manhattan Class A direct vacancy rate and average rental rate remained stable at 8.3 percent and $69 PSF, respectively.
  • In the same month, the Midtown South Class A direct vacancy rate fell to 4.6 percent and the rental rate fell to $68 PSF.
  • The Manhattan Class A sublease vacancy rate remained stable at 1.8 percent between March and April.

Construction

For the twelve months ending March 2012:

  • Building projects (including new, additions and alterations) that started construction in NYC increased by 5.5 percent and infrastructure (non-building) project starts decreased by 4.7 percent from the twelve months ending March 2011.
  • Planned space for building project starts rose by 9.5 percent from the same period in 2011.
  • 2,452 residential building projects with 11,301 units of housing started construction, increases of 9.8 percent and 29.9 percent, respectively over the period.

Travel and Tourism

Transit Ridership

  • Total ridership on MTA subways, trains and buses in March 2012 was 233.7 million, an increase of 0.1 percent from March 2011.
  • Subway ridership in March 2012 was 147.4 million, an increase of 0.6 percent from March 2011.

Source: Metropolitan Transportation Authority

Air Traffic

  • In February 2012, 7.3 million passengers flew into and out of the region's airports, an increase of 9.9 percent from February 2011.
  • Domestic air carriers accounted for 5.0 million passengers, a 10.4 percent increase from February 2011.
  • 2.4 million passengers traveled with international air carriers in February 2012, an 8.8 percent increase from February 2011. 

Source: Port Authority of New York and New Jersey

Hotel Occupancy

  • In March 2012, the average daily hotel room rate was $241, a 5.6 percent increase from March 2011.
  • Hotel occupancy was 87.3 percent in March 2012, up from 84.1 percent in March 2011.
  • The average daily hotel room rate increased the most in lower-priced hotels (charging between $150 and $200 per night).

Broadway Ticket Sales

  • Total Broadway attendance was approximately 1.2 million during the four weeks ending April 29, 2012, up 0.3 percent from the same period last year.
  • Broadway revenue during this period was about $109.7 million, up 10.3 percent from last year.

Source: The Broadway League