Three experts with the Federal Reserve Bank of New York”™s Research and Statistics Group today briefed reporters on aspects of the economic recovery from the pandemic in the region the NY Fed covers.
Jaison R. Abel, and Richard Deitz, assistant vice presidents at the NY Fed and Jason Bram, a research officer, reported that through October their data indicated that business activity in the region”™s service sector had slowed to a moderate pace while manufacturing activity had continued the along the solid growth path. At the same time, they found that local activity is being impeded by the combination of a renewed surge in the virus, severe supply chain disruptions and widespread worker shortages.
“It”™s extremely difficult to separate out the effects of the restrictions that were imposed in our region, in New York City in particular ”¦ (from) basically people being afraid of the virus,” Abel said.
“When you look at the overall decline, only about 10% is due to the restrictions. In other words, the great majority of the change is due to just people who are afraid of the virus. While it”™s possible that the stricter restrictions have had some effect, it”™s unlikely that it”™s the dominant explanatory factory.”
The latest NY Fed job statistics that cover what happened from the onset of the pandemic in February 2020 through the end of this past October reveal that Westchester and Fairfield have faired worse than has the U.S. as a whole. On brighter note, both counties have been doing better in the job recovery than has New York City.
The analysis indicated that there remains a 10% job shortfall in New York City at the end of October compared with before the pandemic. In Fairfield, the job shortfall was cut to only 3.7% by the end of October. In Orange, Rockland and Westchester the shortfall was 7%. Nationwide, the job shortfall from pre-pandemic levels stood at 2.7%.
The NY Fed analysts said that regional growth likely will be hampered until the virus comes under control and there is meaningful progress toward relieving shortages of both workers and supplies.
They pointed out that employment fell by 20% in New York City as the pandemic took hold, a significantly sharper decline than for the nation. The rest of the NY Fed’s region wasn”™t far behind, creating a much larger hole to dig out of than has been facing other parts of the country.
The national job decline was 15% according to NY Fed numbers. Job losses in Northern New Jersey, Fairfield County, and upstate New York were greater than for the nation, at around 17% to 18%.
Bram sad, “The leisure and hospitality sector still accounts for a large share of the job shortfall and it”™s still down about 30% from the pre-pandemic level, which is huge. There”™s a lot of evidence that what is going on is simply that urban hubs, and New York City in particular, are basically getting sort of a perfect storm of office workers and tourists not showing up.”
The education, health and government sectors are also more significant contributors to job shortfalls in the region than is the case nationally, the analysis said.
