DiNapoli sees 37% drop in Wall Street '13 profit
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The Wall Street sign near the front of the New York Stock Exchange. (Aug. 5, 2011) Credit: AFP/Getty Images
Wall Street's profit may fall 37 percent this year, hurt during the second half by rising interest rates, legal costs and budget turmoil in Washington, New York State Comptroller Thomas DiNapoli said.
In a report released Tuesday DiNapoli forecast securities industry earnings at $15 billion in 2013, compared with $23.9 billion the year before, while employment has fallen near a post-recession low. A drop in profit may crimp bonuses, which reached an estimated $20 billion for 2012, he said.
"The political gridlock in Washington may take a bite out of the securities industry's profits for the fourth quarter," DiNapoli said in a statement. "Washington's inability to resolve budget and fiscal issues is bad for business."
An impasse over spending and raising the nation's borrowing limit led to a partial shutdown of U.S. government operations for two weeks this month, as Republicans in Congress fought with Democrats over paring the Affordable Care Act. The turmoil rocked equities and pushed prices higher in the $4.1-trillion market for federal debt. That may lower earnings in the securities industry, which helps drive the New York City's economy, DiNapoli said.
The industry's earnings in 2012 were the third-highest since 1995, and higher than any year before the economic crisis, DiNapoli said. The profits helped push bonuses up 8 percent, he estimated in February.
Employment has tumbled on Wall Street. The number of jobs, at 163,400, remained more than 13 percent lower than before the financial crisis, DiNapoli said Tuesday. Growth after the end of the recession in 2009 halted in the second half of 2011, according to his report.
The average salary for workers in the securities industry reached about $361,000 last year, compared with about $69,000 for the city's 3.4 million nongovernment jobs, the report said. Total wages paid by securities firms fell 2.4 percent to $59.3 billion in 2012, yet still accounted for almost 22 percent of all pay received by nongovernment employees in the city.
Taxes on the securities industry and its workers delivered $10.3 billion to state coffers, or almost 16 percent of all state revenue, the report showed.
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'I'm going to try to avoid it' A trip to the emergency room in a Long Island hospital now averages nearly 4 hours, data shows. NewsdayTV's Virginia Huie reports.
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'I'm going to try to avoid it' A trip to the emergency room in a Long Island hospital now averages nearly 4 hours, data shows. NewsdayTV's Virginia Huie reports.