The latest economic numbers show one city still struggling to recover from the pandemic, with employment in construction, retail, and leisure and hospitality all lagging behind pre-pandemic levels. Here’s your January update on THE CITY’s economic recovery. We publish a new analysis of the city’s employment, employment and financial indicators every month.
New York City’s economy continued to add jobs at a painfully slow pace in December, adding to fears that the city is unlikely to recover all of the nearly 1 million jobs it has lost to the pandemic by the end of 2024 or even 2025 will recover.
The city posted a seasonally adjusted job gain of 13,500 for December, according to data released by the state Labor Department on Thursday – meaning the city has regained just 88% of the number of jobs it lost. The nation as a whole has now topped the pre-pandemic record by about 500,000 jobs.
The city’s three lagging sectors – leisure and hospitality, construction and retail – showed minimal gains despite a surge in tourism, which should have boosted retail, hotels and restaurants. The only ray of hope was an increase in jobs in the warehouse.
The unemployment rate in New York City rose to 5.9%, well above the statewide 3.5%.
Data reported Thursday will be revised in early March using unemployment insurance tax information, which is often more accurate than the surveys used for the monthly Jobs and Unemployment Report.
Where have all the workers gone?
The city’s unemployment rate of 5.9% would be much higher if the city’s labor force had not declined by 300,000 between February 2020 and October 2022, according to a detailed report released Thursday by James Parrott, director of economic and fiscal policy at The , published by New School’s Center for New York City Affairs, with co-author LK Moe.
Parrott argues that most of the decline is due to people leaving the city for “suburbs, upstate or elsewhere.” The largest decline since the first quarter of 2020 was in workers aged 25 to 34, concentrated among those with children aged 4 and younger. Another large decline was seen among those aged 55-64, some of whom were no longer working or looking for work and others who left the city. Like the rest of the nation, the city has seen a decline in the proportion of employed seniors aged 65 and older as more baby boomers choose to retire.
As people left the city during the pandemic, the number of city dwellers with jobs fell by 9%, according to the report. (The City Employment Number tracks jobs in the city held by both city residents and commuters.)
The State Employment Service reported 3.99 million people in work in December 2022, up from 4.31 million in the same month of 2019.
Still other signs point to a turnaround in employee ownership. The labor force participation rate – the percentage of the population aged 16 and over who is either employed or actively looking for work – has risen to 61%, a level previously reached only in April and May 2010.
Parrott debunks the myth that gig work has surged as a result of the pandemic. His research puts the total number of gig workers at around 180,000, just a few thousand more than before the pandemic.
Back to the office?
Average weekday office occupancy in New York City rose to 47% as New Yorkers settled back into their normal COVID-era work routines after the holiday. However, there is no sign that office work will increase significantly in the near future, raising concerns about the fate of New York’s office buildings and tax revenues.
According to real estate company CBRE, office occupancy in the fourth quarter was 30% below the average for the past five years. It reported “negative absorption” of 2 million square feet, meaning businesses were giving up more space than they were renting. The vacancy rate was a worrying 18%.
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