Wall Street’s booming.
The pre-tax profits of securities firms hit a 10-year high in the first half of 2019, state Comptroller Thomas DiNapoli said Friday.
Profits for the January-June period totaled $15.1 billion, up 11% compared with the first six months of 2018. It was the third consecutive gain, year over year, said DiNapoli, of Great Neck Plaza.
The profits of broker/dealer firms are key to the year-end bonuses paid to employees, 6% of whom commute from Long Island. Spending by bonus recipients is a key driver of Nassau County's economy and East End real estate.
DiNapoli hailed Wall Street’s strong showing but said it was unlikely to continue for the remainder of 2019.
“Wall Street had a very profitable start in 2019, but uncertainties leave the second half of the year an open question,” he said. "Volatile markets, global trade tensions and political turbulence have sown economic anxiety and slowed global economic growth."
DiNapoli noted the Dow Jones Industrial Average rose 14% in the January-June period before reaching a new record in July. Since then, the stock markets have been rattled by Democrats' drive to impeach President Donald Trump and tit-for-tat tariff hikes by the United States and China, among other events.
Still, he said New York City's position as the world's financial capital "could be boosted by Brexit and developments in Hong Kong." He was referring to Britain's chaotic attempt to leave the European Union and pro-democracy protests of China's increased control of the Hong Kong government.
DiNapoli predicted jobs in New York City’s securities industry will drop this year by almost 500 compared with a gain of 4,700 positions last year. “Job gains in the early part of 2019 have been erased in recent months,” he said.
The industry employed 181,300 people last year in the five boroughs, primarily in Manhattan. That's the highest level since the recession.
The pre-tax profit data released Friday is adjusted for inflation and covers 120 stock brokerages that are members of the New York Stock Exchange.
Officials in Albany watch closely the changes in Wall Street profits because taxes on them generate 17% of state government revenue.
The average salary of Wall Street workers, including bonus payments, fell 5.6% last year to $398,600. Still, that sum was nearly double the next highest average salary, $202,200 for bankers in the city.
Securities workers on Long Island earned, on average, $376,800 last year.
The industry's high salaries and bonus payments fuel consumer spending, which accounts for 70% of economic activity in the metropolitan area.
Employees often use their bonuses to buy second homes in the Hamptons and apartments in Manhattan, automobiles, boats and vacations to exotic locales. Some also pay for private schools for their children.
DiNapoli said, "What happens on Wall Street directly impacts the New York State and New York City economies."