The Federal Reserve Bank of New York is asking the question Good News or Bad on New York City Jobs?
Unlike much of the nation, New York City has seen a robust rebound in employment since the recession. In early 2012, employment here reached 3.86 million, the largest number of jobs ever recorded. Yet the city’s unemployment rate has risen in recent months and is now 10 percent—its peak during the recession—and well above the 5 percent rate seen before the downturn. Two estimates of New York City employment are reported each month—the count of the number of jobs (based on a survey of business establishments) and a count of the number of people employed (based on a household survey).Between August 2008 and December 2010 the establishment survey showed that New York City lost 130,000 jobs, or about 4 percent of total city employment, and the household survey showed comparable declines.As of June 2012, however, the establishment survey showed that city employment had rebounded by almost 200,000, reaching an all time high, while the household survey showed no rebound at all. In fact, the unemployment rate, which is calculated from the household survey, has recently crept up—from 9.1 percent in December to 10.0 percent in June. [Anecdotes and arrows in dark red by Mish]We look to three possible explanations for why these two employment measures have diverged so sharply in New York City. First, and most obvious, is commuters. Jobs in the city held by people who commute from the rest of the metro area are counted in the establishment survey, but not in the household survey. If most of the new jobs were going to commuters and few to city residents, that would help explain some of this divergence. A second possible explanation for the rise of the gap might reflect the
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