Download Economic Notes (pdf)

New York City's economy began to make its way out of recession in the third quarter of 2003, according to Economic Notes, a publication issued by the office of New York City Comptroller William C. Thompson, Jr.

"After 10 consecutive quarters of decline, the City is showing clear signs of economic recovery, primarily due to increases in private sector jobs and Wall Street profits," Thompson said. "While we are encouraged that GCP rose by 0.3 percent in the third quarter of 2003, this increase is dwarfed by the rapid growth of U.S. GDP of 8.2 percent."

Thompson noted that "The National Bureau of Economic Research officially declared the nation's recession over in November 2001. Unfortunately, the City's economic turnaround has lagged the nation's by seven quarters. The nation's GDP growth was the largest single-quarter growth in almost two decades. Moreover, the nation's impressive growth demonstrates that we still have a long way to go before the City experiences full economic recovery."

Based on the revised job numbers for September that the Comptroller's Office seasonally adjusted in November, NYC jobs continued to decline for the 11th consecutive quarter, with an overall loss of 8,600 jobs despite a gain in the private sector of 1,700 jobs. The job gains for the City and the nation originally released in October were revised upward in November, but the revisions were not sufficient to erase the job loss in the third quarter.

The latest issue of Economic Notes also reports the following New York City data:

• Payroll jobs in the City, seasonally adjusted, fell by 8,600 in 3Q03. However, private firms added 1,700 jobs. Compared with 3Q02 (not seasonally adjusted), jobs fell 1.4 percent, the third-weakest performance of the 20 largest metro areas, after Boston and San Francisco. The nation lost 72,700 jobs in 3Q03.
  
  
• Personal income tax (PIT) revenues rose 10.9 percent in 3Q03, on a year-over-year basis. PIT is a proxy for personal incomes, which are reported only after a three-quarter lag. This increase partly reflects higher City tax rates. Estimated taxes increased 19.0 percent, reflecting increases in dividends and capital gains. Withholding taxes increased 8.5 percent. U.S. PIT revenues decreased 12.1 percent in 3Q03, because of cuts in tax rates. Tax collections were higher, partly because of an increase in tax rates, despite a 3Q03 decline in jobs.
  
  
• The inflation rate in the NYC metropolitan area rose in 3Q03 to 3.1 percent. This was an increase from 2.7 percent in 2Q03. This 3Q03 inflation rate is the third-highest rate among the 14 largest metropolitan areas. The U.S. inflation rate was 2.2 percent.
  
  
• The unemployment rate in NYC, seasonally adjusted, increased to 8.3 percent in 3Q03. This was a small increase from 8.2 percent in 2Q03. The U.S. unemployment rate, also seasonally adjusted, decreased to 6.1 percent in 3Q03, from 6.2 percent in 2Q03.
  
  
• Real estate commercial vacancies rose and rents fell. The Manhattan commercial vacancy rate in 3Q03 increased to 12.5 percent, 0.7 percentage points up from 11.8 percent in 3Q02. Average Manhattan commercial rents decreased to $40.39 per square foot in 3Q03, down from $44.13 in 3Q02.
  
  
• Leading economic indicators for the City were mixed. The City's help-wanted-advertising index and NYC business-conditions index fell, but the number of building permits authorized rose in 3Q03 on a year-over-year basis. Both the City's help-wanted-advertising index and NYC business conditions index were up in September. NYC business-conditions index rose in September after nine consecutive months of decline.
  
  Summary Table. Five Key Economic Indicators, NYC and U.S., 3Q03