New York City's economy grew at its slowest clip in more than two years in the fourth quarter, and the once red-hot real estate sector cut 1,000 jobs after seven quarters of growth, according to a new report released Tuesday.
This was the real estate industry's biggest round of job cuts since 2001. The city's economy started shrinking before Sept. 11, but the attacks accelerated what became a roughly two-year downturn.
Mayor Michael Bloomberg, asked about the report at a news conference, said: "Perhaps the biggest impact that the economy can have is if real estate transactions slow down. That will make a major difference in our tax revenues."
New York City got much of its $3.2 billion budget surplus from the real estate sector's boom.
However, Wall Street, New York City's hometown industry, added 1,900 jobs, according to Comptroller William Thompson's report. This was its third-biggest addition in nearly four years. Wall Street workers' buying habits can be a huge plus: Their average pay of $269,261 a year tops that of any other sector.
Yet the Democratic comptroller cautioned that the securities industry's profits fell 21.1 percent to $7.1 billion in the first three quarters of 2005. Banks and brokerages earned $9 billion a year ago.
The so-called Gross City Product, which gauges the city's overall economy, grew 2.1 percent in the fourth quarter. But that was a drop of more than 1 percentage point from the third quarter's 3.3 percent rise, Thompson said.
New York City's 5.8 percent unemployment rate in the latest period was the second highest in the nation, after Detroit's 6.7 percent jobless rate. Washington, D.C. won this race with an unemployment rate of only 3.1 percent.
Keeping an eye on the competition
"I think the scary things are that we live in a very competitive world," Bloomberg said. "Other cities want to take our companies, want to take our big events, our tourists, want to take our students. We're going to have to consistently focus on making this a better place to live," he added, listing needed improvements in public schools, for example.
Still, Bloomberg noted the city's latest jobless rate of 5.3 percent was its lowest in five years.
In the fourth quarter, New York City's private employers hired 3,700 workers, the smallest number in two years, Thompson said.
The education and health services industries, which have more than 22 percent of the city's private-sector jobs, hired 2,800 workers. They have the third-lowest yearly pay, averaging just $40,847.
Bars and restaurants hired 2,200 employees. But they had the lowest annual wages, averaging just $25,216 a year.