Job Losses Ebbing But Will Continue

NEW YORK CITY-The office-using employment picture here will continue to dim for at least two more quarters, says Barbara Byrne Denham, chief economist at Eastern Consolidated. However, she tells GlobeSt.com that notwithstanding a sharp uptick in December, job losses have been tapering off over the past several months, and Denham writes in her monthly “NYC Employment Report” that the numbers won’t climb as high as they did in the early 2000s.

Figures released late last week by the state Department of Labor put the December unemployment rate for the city at a seasonally adjusted 10.6%, its highest in more than a decade and higher than either New York State or the nation as a whole. “If you look closely at the underlying unemployment rate numbers, the number of employed New York City residents was flat in October and November, then fell sharply in December,” she tells GlobeSt.com. “This looks rather volatile, which leads me to think that there was a data collection problem somewhere in there.”

Since the state’s unemployment forecasts are based on household surveys rather than employer reports, Denham thinks the job-loss figures–i.e. the numbers of positions that were actually eliminated–provide a more accurate barometer of the local economic weather. For one thing, she says, the state projections are based on fairly small samples; for another, some of the survey respondents may reverse-commute to the city’s western, northern or eastern suburbs, and their job losses do not reflect downsizing by city-based employers.

State Labor Department figures show that the five boroughs lost 67,500 private-sector jobs between December 2008 and December 2009, a 2.1% drop. That’s comparable with the rate of job elimination in several other metro areas across the Empire State, including Albany-Schenectady-Troy, Buffalo-Niagara Falls, Long Island and the city’s northern suburbs, although higher than in some upstate areas.

With that said, Denham agrees that the effects of office-using job losses have had a greater impact in the city than they have nationwide–but only marginally. “New York City has lost 6.6% of its office-using employees since the start of the recession, while the US has lost 6.5%,” she tells GlobeSt.com. “This suggests that New York’s office market has suffered slightly more so than the US as a whole. The US suffered more in its construction and hospitality industries.”

The Eastern Consolidated report notes that New York City lost 9,100 jobs in December; 3,300 of which were in the public sector. “The private sector lost 5,800 jobs in the month, led by accounting which lost 1,400 jobs, restaurants (-1,300 jobs) and retail trade (-1,100),” Denham writes. “It should be noted that the prior month’s report of 11,400 job losses in the city was revised downward to 5,600 losses, with only 1,800 jobs lost in the private sector.” Most of the public-sector losses came from city government, driven by the elimination of temporary jobs that had been created with federal stimulus funds.

On a more upbeat note, the securities industry added 600 jobs during December, but Denham cautions that this may not signal a return to positive employment growth generally. “Usually, securities and employment services are lead industries; i.e. they start to add jobs before the rest of the economy,” she tells GlobeSt.com. Securities losses have probably abated, but employment services is still losing jobs.” Therefore, she says, job losses “may taper off a bit, but I think they will continue for at least six more months.”

Nor should much comfort be taken from the fact the jobs were added in the healthcare and education sectors during December. “Health services adds jobs constantly, as does education,” Denham says. “I do hear some positive anecdotal news from Wall Street related to hiring and business, but little elsewhere.”