Compared with a year ago, the number of people on unemployment in October rose by nearly 20,000, or 37 percent, the sharpest year-over-year increase since May 2002, the New York State Department of Labor said Thursday, November 20.
On the heels of massive layoffs announced by Citigroup this week, the Labor Department’s monthly report brought little in the way of good news. The unemployment rate in October did decrease by 0.1 percent, to 5.7 percent, but economists said that slight drop was statistically insignificant.
The city lost 7,000 private-sector jobs in October, the largest one-month loss in the recent downturn, according to a seasonal adjustment of Labor Department data by Eastern Consolidated.
While the depth of losses in any one industry was not significant, the pain was spread around the city economy.
Health services, retail trade, manufacturing, construction, banking and employment services all saw losses.
“The loss of jobs in November clearly indicates that New York City has entered a recession,” said Barbara Byrne Denham, chief economist at Eastern Consolidated. “The anecdotal evidence had been overwhelmingly indicative of a recession these past few months, and now the numbers are finally starting to support the anecdotes.”
Surprisingly, the city lost only 700 securities jobs last month, despite announcements that indicate massive layoffs. Economists theorize that many laid-off Wall Street workers are still being carried on payrolls because of severance packages.
“What we’re expecting to see is a snowballing in securities, and we haven’t seen it yet,” said Marcia Van Wagner, the city’s deputy comptroller for budget.
Information technology cutbacks resulted in 600 jobs being shed from the computer systems sector. As many as 165,000 jobs could be lost in the city over the next two years as the financial crisis spreads beyond Wall Street, according to a forecast by comptroller William Thompson.
The city continued to post over-the-year job gains, growing at a rate of 0.2 percent, while the state and the nation lost jobs. Educational and health services continued to lead the way, with gains also seen in leisure and hospitality.
But the rate of growth slowed from 0.6 percent in September and weakness in key sectors is a portent of trouble on the horizon, said James Brown, a Department of Labor economist.
“It’s dwindling fast,” he said. “You’d expect big growth in retail, leisure and hospitality, but they have been unusually weak. That’s a sign that we’re going to have a poor Christmas season.”