New York and New Jersey may lag behind the rest of the nation in terms of recovery, according to a report from the New York Federal Reserve. While Fed economists said that the worst of the recession in the region has passed, the disproportionate number of job losses in the securities and financial sector, along with the consolidation and reorganization of financial firms, will cause a delay in economic improvement. “A downsizing of the area’s critical financial sector could post a major risk to the economic outlook going forward,” the report says, adding that new regulatory changes in the industry “have the potential to dramatically reshape this sector.” As many of the region’s financial powerhouses pared down in size, the subsequent reduction in commercial real estate demand has put a strain on municipal services, which relies on the tax revenue from those businesses.
New York and New Jersey lagging in economic recovery
Reduction in commercial real estate demand puts strain on municipal services