The outlook for the New York state economy appears to be stabilizing, according to the American Institute of Economic Research. The analysis was presented in the most recent “NYCUA Monthly Economic Review,” which is provided as a benefit of membership to New York Credit Union Association member credit unions.
AIER noted that data across several sectors is showing improvement, posting outright gains or slowing declines. Notably, AIER found consumer spending is supported by a solid labor market, rising incomes, positive consumer sentiment, and supportive financial conditions.
For the labor market, the unemployment rate for the U.S. is 3.6%, near a six-decade low, while New York has an unemployment rate of 4%, though rates across the state vary widely from a low of 2.7% in Port Chester Village to a high of 5.9% in Watertown City. For New York City, the unemployment rate is 4.1% while New York state excluding New York City is 3.9%. Consistent with the tight labor market and low unemployment rate, initial claims for unemployment insurance remain near record lows for the country and for New York.
Data from the Federal Reserve Bank of New York show debt per capita rose for the third quarter in a row. Overall debt per capita rose to $52,070, a 2.1% increase over the past year. The gain was led by a $460 rise in mortgage loan debt per capita. Traditional mortgage debt rose for the third straight quarter, to $34,920, a 2.8% gain from the third quarter of 2018. Offsetting some of that gain was a decline in home equity debt per capita. Mortgage debt remains the largest component of total consumer debt, accounting for 67.1% of the total with home equity loans accounting for another 3.9%.
Student loans are the second-largest category, accounting for 12%. This segment has been rising as a share of debt over the past several years. Auto loans and credit cards each account for just over 7% of the total while the catchall “other” category is just 2.5% of the total. Rising debt can be a sign of confidence in the outlook or early signs of trouble. These data along with consumer loan performance (delinquencies and defaults) should be monitored carefully.
The latest readings from the Federal Reserve Bank of Philadelphia’s state leading indicators were up significantly in the latest month. The state leading indexes are designed to predict the six-month growth rate of each state’s coincident index. Among the inputs for the indexes are manufacturing-supplier delivery times, initial claims for unemployment insurance, and housing permits.
The latest data show New York state’s leading index posting a reading of 1.4% in September. That is double the 0.7% in August but still below the 2% readings in the second quarter of 2018. The results, if sustained, suggest the six-month growth rate in the state’s coincident index is likely to accelerate in coming months from the 0.8% growth in September.
Surveys covering the manufacturing and services sectors from the Federal Reserve Bank of New York were mixed in November. The Empire State Manufacturing Survey General Business Conditions Index fell 1.1 points to 2.9 while the Business Leaders Survey Business Activity Index rose 7.2 points to 2.9. For both these surveys, zero is neutral with positive readings suggesting growth and negative readings suggesting contraction.
Within the manufacturing survey, current conditions indexes, the new-orders, unfilled-orders, and number of employees indexes all increased in the latest month while the remaining six had declines. Among the 10, seven had results above zero while three were negative. Among the forward-looking indicators, 10 of the 12 were higher in November than October, including the General Business Conditions Index, New Orders Index, Unfilled Orders Index, and Capital Expenditures Index. Eleven of the twelve indexes were in positive territory.
Among the components of the Business Leaders Survey, two of seven current indicators improved in November. For the forward-looking indicators, three had gains for the month while four weakened but all of the indexes except the Future Business Climate index were in positive territory.
Overall, the mixed results from a broad range of data suggest some modest improvement in business conditions in New York, though the outlook remains uncertain.