New York City is in for a banner 2007 if the rule holds true that the vigor of the local economy is highly correlated to the year-end bonuses paid to Wall Street’s investment bankers.

Goldman Sachs Group Inc., already the financial world’s most profitable bank, announced yesterday that third-quarter revenues, bolstered by its investment banking and trading operations, set a new Wall Street record.

As part of the announcement, Goldman told employees it was setting aside $13.9 billion in compensation — averaging out to some $542,000 for each of the 27,647 workers on its payroll — at the end of its third quarter. The firm allocates 50% of revenues to pay for the first three quarters and about 36% in the final quarter.

Although Goldman Sachs is just one of many Wall Street firms looking for a greater share of its earnings from its sales and trading operations these days, the firm’s investment banking fees rose 27% during the third quarter. And it is bonus checks earned for striking old-fashioned investment banking deals that are cashed and trickle down into all areas of New York City’s economy.

“Is business good for everyone when Goldman Sachs has a great year? You bet it is,” a Porsche salesman at Manhattan Motorcars, Manny Quinones, said.

Of course, year-end bonuses at Wall Street’s largest investment banks are not distributed in equally divided parts — much to the chagrin of first-year associates everywhere, who might or might not be driving new Porsches five months from now. Intergalactic sums surpassing $10 million are paid out to the privileged few: typically managing directors and star traders. But this year, even junior level analysts and newly minted MBAs stand to fetch $50,000 and up when the firm doles out its bonuses in February.

“Wall Street revenues were very strong in the first two quarters of this year and that will drive compensation higher than last year to record levels,” the chief executive officer of Options Group, Michael Karp, said.

One man who will be missing out on this year’s bonuses is Henry Paulson, the chairman and chief executive officer who left the firm earlier this year to become secretary of the Treasury. The records posted during the third quarter occurred under the watch of Lloyd Blankfein, who took over from Mr. Paulson in June.

Goldman’s third-quarter revenue rose 2%, to $7.46 billion. Net income for the three months ended August 25 actually fell 1.4%, to $1.59 billion. If it weren’t for a new accounting rule requiring Goldman to record $133 million of non-cash expenses for stock grants during that period, profits would have risen to $1.68 billion.

With the cash left over from the planned bonuses, Goldman has decided that it would be a good idea to buy a big chunk of itself. The firm’s board of directors has authorized the repurchase of 60 million shares, valued at $9.06 billion at the close of yesterday’s trading. Excluding the costs for stock compensation, the firm said its return on equity was 26.5%.

Despite a mergers and acquisitions market that has not fully rebounded, Goldman’s merger fees rose 9% during the same period.