NYC’s economy grew 3% in Q1 amid lower corporate tax rates: Report

Comptroller Scott Stringer released a report Monday detailing modest growth in the city’s economy — growth that was largely due to lower corporate tax rates. Photo Credit: Craig Ruttle

The city’s economy grew in the first quarter of this year, but not as robustly as at the end of last year, according to a report by city Comptroller Scott Stringer.

And the growth didn’t result in a large increase in consumer spending, which rose at less than half the rate of the economy in general, the report said.

There was a 3 percent quarter-over-quarter increase in the Real Gross City Product for the first part of this year, compared with a 3.5 percent increase in the last quarter of 2019.

According to the report, this year’s growth was due in large part to lower corporate tax rates: Net income after taxes for the top six banks was nearly $32 billion nationally following a 12.2 percent tax decrease from last year. This was the best first-quarter level on record, the report said.

Consumer spending, however, did not keep pace: Nationally, consumer spending grew only 1.2 percent in the first quarter of 2019. The report attributed this to concerns over "spending on health care, financial services, and insurance."

And while the city’s private sector added 18,000 jobs in the first quarter (or an increase of 1.6 percent on a seasonally adjusted annualized rate basis), that was far fewer than the 28,800 jobs created in the last quarter of 2018, according to the report.

The city’s unemployment rate remained relatively low, but it did rise from 4 percent during the last quarter of 2018 to 4.2 percent in the first quarter this year (or 8,900 more unemployed New Yorkers). The rate, however, was still significantly lower than it was in the last quarter of 2009, at the height of the Great Recession, when it was 10.1 percent.

The Bronx had the highest unemployment rate of the five boroughs at 6.2 percent, followed by a 4.7 percent unemployment rate in Brooklyn.