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As America Slows, New York City Is Booming

Thursday, 27 Sep 2012 | 3:17 PM ET
New York City skyline
Photo: Jumper | Photodisc | Getty Images
New York City skyline

The August Indexes of Coincident Economic Indicators (CEIs) for New York State, New York City and New Jersey were released yesterday.

And here's what they show: New York City is booming.

From New York Fed's Liberty Street Economics blog:

The CEIs indicate that economic growth has varied considerably across the region. In New York State, activity has grown in fits and starts thus far in 2012. After expanding at a brisk pace during the first quarter, activity leveled off in April and May. Since then, New York State’s economy has expanded at an annual rate of a little less than 2 percent, on average. Despite the modest growth of late, the state’s economy has, at this point, reversed more than two-thirds of the decline during the Empire State’s last downturn, which is estimated to have ended in November 2009.

The index for New York City shows the local economy continuing to expand briskly. Since surpassing its pre-recession peak one year ago, the city’s economy has grown at not only a healthy, but also a steadily accelerating pace. Growth averaged roughly 2½ percent in the second half of 2011, 4½ percent in the first half of 2012, and more than 5½ percent in July and August. The economy is estimated to have expanded by 12 percent since the trough of the last economic downturn in October 2009. That downturn appears to have been both shorter and somewhat milder than the 1990 and 2001 downturns, and the pace of the ensuing recovery has been at least as robust.

The contrast with the slowing growth of the country as a whole is stark. With today's revised numbers, GDP growth for the country as a whole was just 1.3 percent in the second quarter. Surely one reason for this is that the New York is uniquely exposed to finance.

Quantitative easing might not do much for the rest of the U.S. economy, but it sure seems to be helping New York.

- by CNBC.com senior editor John Carney

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