NYC Economic Blues

Recent reports indicate that New York City is getting hit by more than the latest blizzard. The City's economy is showing significant signs of distress. That's the word in this morning's New York Times: "New York City has lost almost 176,000 jobs in two years — more than the population of many cities. The unemployment rate, which in the spring of 2001 had fallen to 5.3 percent, has been climbing steadily and jumped to 8.4 percent in December."

New York City has gone through boom and bust before, says Christine M. Cumming, director of research for the Federal Reserve Bank of New York. She recalls the economic slump that shook the City and surrounding region during the 1989-1992 period. That downturn hit most of New York State, Connecticut, and New Jersey. This one is different. Only New York City has been clobbered this time around. The unemployment rates of New Jersey and Connecticut remain below the national average--at least for now.

What's the reason? Can't blame this one on economic over-concentration. The City's economic base is more diversified today than it was 20 years ago. The most likely cause seen at this point is that NY City is still feeling the aftermath of 9/11 and subsequent concerns about terrorist attack.

Go here to read more.