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October 05, 2010

 

DiNapoli: Slow Recovery From Recession for New York

The New York State economy remains seriously damaged from the worst national recession in decades, precipitated by high risk lending practices, according to a report on economic trends in New York State released today by New York State Comptroller Thomas P. DiNapoli. According to the report, New York's economy is slowly improving, but the recovery is fragile and is likely to be lengthy with weak job gains. Although the downturn was less severe in New York than in the nation, the State still lost 367,400 jobs and the unemployment rate more than doubled to 8.9 percent during the recession—a 17-year high.

“New York’s economy is improving, but not fast enough,” DiNapoli said.”Job growth has been weak and not all of regions of the State are benefiting equally. While revenue collections are also improving, the rate of growth is too slow to solve New York’s budget problems. State and local governments must focus on reducing the cost of government.  New Yorkers are tightening their belts.  Government has to do the same.”

DiNapoli’s report also found that Wall Street’s recent return to profitability led to higher bonuses and higher average compensation in 2009, but job losses are continuing. The securities industry in New York City lost 4,200 jobs during the first eight months of 2010, bringing the total job loss since January 2008 to 31,300 jobs, a decline of 16.6 percent.

DiNapoli’s report suggests that future federal assistance may be limited as the federal government turns its attention to reducing its own budget deficit. That means New York State and its localities will likely have to solve their own budget problems.

The report also highlights:

  • New York’s Gross State Product (GSP) declined for three consecutive quarters beginning in the third quarter of 2008.
  • The State gained 61,200 jobs between December 2009 and August 2010, but job growth has been concentrated in New York City and its suburbs. The private sector created 68,900 jobs, while the public sector contracted due to budgetary pressures. The unemployment rate eased only slightly to 8.3 percent in August 2010 despite these job gains.
  • State personal income declined by 3.1 percent in 2009—the first annual decline in 70 years.
  • Foreclosures in New York rose by 30 percent between 2007 and 2009, but the rate of increase was much lower than it was in the nation.
  • Home prices fell sharply during the recession, particularly downstate, but stabilized during the first half of 2010. The number of home sales rose by 26.5 percent during this period, but growth has eased recently with the end of the federal tax credit for home buyers.

For a copy of the report visit: http://www.osc.state.ny.us/reports/economic/nys_economic_trends.pdf

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