November 19, 2010
City unemployment drops to 9.2% in October
Widespread gains in private-sector jobs more than compensate for cuts in
public payrolls, state labor department finds; city adds nearly 10,000 jobs for
the month.
By Daniel Massey
The city economy added 14,400 private-sector jobs in October as the recovery regained
momentum after a shaky September, according to an analysis of new state Department of Labor
data.
The city lost 4,500 public sector jobs, for a net gain of 9,900 jobs last month, according to
analysis by real estate services firm Eastern Consolidated. The city’s unemployment rate fell to
9.2% in October, from 9.3% in September.
In a year, the city has shaved 1.2 percentage points off of its jobless rate. That means about
50,000 fewer residents are unemployed than in October 2009, said James Brown, principal
economist at the state DOL.
New York state’s economy gained 40,500 private-sector jobs, or 0.6%. This was the state’s
largest monthly increase since April 2005. The state unemployment rate remained unchanged at
8.3%.
The job gains for the city in October was widespread, with professional and business services
rebounding after a weak September, adding 10,900 jobs. This sector has led the city’s recovery,
buoyed by a return of corporate profits that encouraged higher spending on many of the services
these firms provide.
“Overall, we’re seeing a definite improving tone,” Mr. Brown said. “We are definitely coming
back faster than I would have thought.”
Since December 2009, the city has added 74,100 private-sector jobs, or about 2.4%.
Employment services added 2,600 jobs in October, a sign the city economy is “truly on an
upswing,” said Barbara Byrne Denham, chief economist at Eastern Consolidated. That industry,
which is dominated by temporary employees, tends to add jobs ahead of others as employers test
the waters of economic recovery.
The all-important securities industry added 1,700 jobs in October, bringing total employment on
Wall Street to 161,100 jobs. The industry has made up for all but 700 of the jobs lost in 2010, but
it is still 27,900 below the peak of January 2008, Ms. Denham said. A report earlier this week by
state Comptroller Thomas DiNapoli predicted the securities industry could lose another 7,000
jobs before sustained hiring picks up.
October losses were concentrated in tourist-related sectors, which had previously shown
strength. Arts and entertainment lost 2,300 jobs, hotels shed 700 positions and restaurants cut
400 jobs.
The city’s job-growth rate of 1.9% this year continues to outpace the national rate of 0.7%. New
York City has captured 8% of the 874,000 jobs gained nationally in 2010, despite accounting for
only 3% of the national employment base, Ms. Denham said. This was down from 10.3% in
September.
Net job loss in the city since the peak of September 2008 now stands at 107,600, Ms. Denham
said.
While the job news for October was bright, the local recovery won’t be getting much help from
City Hall anytime soon. Mayor Michael Bloomberg released his updated financial plan for the
city Thursday, announcing $1.6 billion in cuts to help close a $3.3 billion gap in the fiscal 2012
budget.
The mayor’s plan calls for 889 layoffs in the current fiscal year and an additional 5,312 the
following year. An additional 4,213 jobs will be cut via attrition. With the cuts, the fiscal 2012
gap is projected to be $2.4 billion, meaning additional cuts or new revenue sources will need to
be found in order to balance the budget.
“[Municipal employment] numbers will continue to decline,” said James Parrott, chief economist
at the Fiscal Policy Institute. “That will certainly be a drag on the overall employment recovery.”
The cuts, the ninth round of gap closing actions required of city agencies, were spread across the
city agencies. The Department of Education will lose 6,100 teachers, the Police Department will
have to cut 350 civilian positions, and the Department of Corrections has to eliminate 51
correction officer positions. Some 200 sanitation supervisors are being demoted to frontline
worker positions, and 118 support jobs at the Administration for Children’s Services are being
axed. Libraries will be open a day less per week, 20 firehouses will have nighttime hours reduced
and 9,000 fewer potholes will be filled.
In a letter to Mr. Bloomberg, District Council 37 President Lillian Roberts outlined $500 million
in potential new revenue that could lessen the need for massive cuts. The ideas, which came form
the union’s membership, include increased tax collection on cell phone antennas and a voluntary
15% vendor rate reduction, the latter proposal based on programs instituted in Los Angeles and
Chicago.
Also Thursday, the U.S. Bureau of Economic Analysis released a breakdown of gross domestic
product by state. New York’s GDP fell by 4.3% in 2009, the third steepest drop in the nation.
But Mr. Parrott said the BEA report did not take corporate profits into account and therefore
“dramatically overstates New York state’s actual economic decline for 2009.” Mr. Parrott said
that examining employment, which dropped by 209,000, or 1.9%, statewide last year, presents a
more accurate picture of the state economy, placing it 10th best in the nation.