NY comptroller: Wall Street profits may slow
ALBANY, New York (AP) — Though Wall Street recorded $10.1 billion in profits for the first half of 2013, New York’s comptroller said Tuesday that federal budget dithering, higher interest rates and litigation may slow earnings for the last half in a securities industry that has kept trimming jobs.
In a report, Comptroller Thomas DiNapoli projected that overall earnings have been limited to $15 billion this year, compared with $23.9 billion last year.
“The political gridlock in Washington may take a bite out of the security industry’s profits for the fourth quarter,” DiNapoli said. “Washington’s inability to resolve budget and fiscal issues is bad for business.”
The 16-day partial federal government shutdown ended last week, but a possible repeat may be on the horizon. Lawmakers approved a budget that keeps the lights on through Jan. 15 and lets the Treasury Department continue to pay its bills through Feb. 7.
A standoff between President Barack Obama and a group of Republicans over spending for the budget year beginning Oct. 1 and possible defunding of the nation’s health care overhaul led to the shutdown. Lawmakers also pushed the country to the edge of economic default by threatening the Treasury Department’s authority to continue borrowing the money needed to pay the nation’s bills.
The annual comptroller’s report said there were 163,400 total jobs on Wall Street in August, down from 168,700 a year earlier. However, New York’s financial sector still had 2.5 times more jobs than No. 2 California and they pay an average $360,700 salary, or about five times more than the rest of New York City’s private sector.
DiNapoli predicted the industry will continue to streamline in adapting to changing regulatory and economic circumstances.
The report noted that unlike previous economic recoveries in New York City, the current rebound is driven by other industries that have added 335,000 jobs, more than double the total lost in the recession, with an average salary of $69,200.
The securities industry remained one of the city’s main economic engines, last year accounting for 5.1 percent of its jobs but nearly 22 percent of all private sector wages.