On the surface, NYC’s job losses do not bode well

Jobs are inextricably connected to the health of the housing market for reasons that must be obvious.  That’s one reason that Washington, D.C., seems to be recovering from its housing blues.  After all, government dominates in the metropolitan region.

Thus, the news in yesterday’s New York Times about the city’s unemployment rate seems to suggest a grim outlook for the Big Apple.  But a closer look at the statistics may possibly imply otherwise.

In June, the city’s unemployment rate jumped to 9.5 percent,  the newspaper said. The rate of joblessness in the city had not been as high in almost 12 years. In May, it was 8.9 percent, significantly lower than the national rate of 9.4 percent for that month. More than 380,000 people in the city were unable to find work last month, an increase of about 170,000 from a year before, according to data released by the State Department of Labor.

The last time so many city residents were unemployed was in the early 1990s, in the wake of the long, deep recession after the 1987 stock market crash, said James Brown, a Labor Department economist.

The city’s unemployment rate was higher in 1997 than it is now, he said, but the overall job market was stronger then. Brown said that mounting job losses in financial services and other professional fields suggest that the city’s economy will remain weak for the immediate future.

I certainly could be accused of cynicism for taking any pleasure in what the state’s labor commissioner said at a news conference the other day, but the fact is that beneath the statistics is the tiniest sliver of hope for the housing market.

Commissioner M. Patricia Smith observed that the recession was taking its greatest toll on less educated workers who were earning lower wages.   Nearly half of all unemployed New Yorkers were earning less than $23,000, Smith said.  They are not the individuals who would be buying property, yet it is true that their joblessness implies an unhealthy economy, which could not be a good thing for Manhattan real estate.

And, no, the last thing I would do is celebrate Smith’s observation.  Rather, it is truly sobering information that makes me want to help even as it makes me feel helpless.

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

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