Hudson ValleyFirst Quarter 2013Summary
Since the end of the Great Recession in June of 2009, GDP has grown slightly less than 2.00percent per year: high enough to maintain the current level of joblessness, but not of sufficient magnitudeto provide full employment. Continued contraction in public-sector spending and employment is addingto this weakness as is the household sector’s unwillingness to forego saving and/or incur debt to supportcurrent consumption. There are pockets of growth in both the national and regional economies and thehousing sector has begun to build a sustainable bottom. However, overall economic activity will not fullyrecover until the average household witnesses sustained income growth.The Great Recession exposed many flaws in the U.S. economy, starting with the persistent shiftaway from wage, salary, and benefit income (earned income) in favor of profits and ending with the use of debt as a substitute for earned income growth. Over the past 20 years, earned income as a percent of national income has fallen at an annualized rate of -.29 percent while profits have grown .56 percent perannum. This trend accelerated during the most recent 10-year period, with earned income as a share of national income falling -.43 percent per annum while profits grew .64 percent per annum. As of 2011,wages, salaries, and benefits accounted for 55.20 percent of national income, and profits accounted for25.20 percent, compared to 57.40 percent and 23.60 percent in 2002 and 58.30 percent and 22.30 percentin 1992. Over the same time periods, employment and job growth have stagnated and unemployment hasrisen. During the 20-year period ending in 2011, the regional labor force grew .55 percent per annumcompared to a .50 percent per annum growth in employment. Over the more recent 10-year period, boththe labor force and employment witnessed negative rates of growth at -.06 percent and -.31 percent,respectively. Because employment declined at a faster pace than the contraction in the labor force, thenumber of unemployed workers grew 4.38 percent per year. Coincident with the weak regional labormarket was a contraction in public-sector employment and a private sector that grew at an annual rate of .14 percent.The long-term weaknesses outlined above continue to impact the regional economy. Over themost recent 12-month period, labor-force participation and employment was essentially unchanged, and while the private sector added 7,100 jobs, the job count in the public sector continued to decline (-2,800).Overall, labor-force participation increased (667) from 1,114,567 participants in the first quarter of 2012 to1,115,233 in the first quarter of 2013, employment increased (1,133) from 1,026,633 to 1,027,767, and theregional job count advanced (4,300) from 883,533 to 887,833.As noted in previous reports, employment and labor-force participation peaked in July of 2008—seven months after the start of the Great Recession—at 1,128,600 and 1,189,600, respectively. Employmentreached a post-recession low in February of 2012 at 1,024,400 while the labor force bottomed out a yearlater (March of 2013) at 1,109,100.
From peak to trough, employment contracted 9.23 percent (104,200)and labor-force participation fell 6.77 percent (80,500). Similarly, the private-sector job count peaked inthe second quarter of 2008 at 756,433 and reached a post-recession low in the first quarter of 2012 at697,233. From peak to trough, the private-sector job count fell 7.83 percent (59,200).