Employers in New York City significantly reduced hiring in the first half of the year, adding just 956 private-sector jobs, the city’s slowest growth in payrolls outside a recession in decades.
During the same period last year, companies in the city hired 66,000 additional workers, according to data from the city’s Office of Management and Budget. But companies have since slowed their hiring, and major industries that fuel New York’s economy — finance and insurance; hospitality; and retail — have shed jobs.
Around the country, the labor market has started showing cracks as the effects of President Trump’s economic policies begin to settle in. Other large cities have also seen sluggish job growth, with metro areas like Los Angeles, San Francisco and San Jose all losing a small number of jobs so far this year.
“The New York City economy has gone sideways so far this year,” said Mark Zandi, the chief economist of Moody’s Analytics. “New York is a leading indicator, and the flattening of employment is now showing up nationally.”
The sharp slowdown in the New York City’s labor market followed a resurgence last year in the local economy, which emerged slowly from the pandemic but reached a record level of employment with record bonuses for Wall Street workers.
Now, the labor market in the largest municipal economy in the country appears notably weaker. The pace of job growth this year is the slowest since 2003, excluding the pandemic and the Great Recession.
“It is shocking because we aren’t in a recession,” said Lauren Melodia, the director of economic and fiscal policy at the New School’s Center for New York City Affairs. “At the same time, it’s not shocking given the political environment and impact on the economy.”
In May, the city’s Independent Budget Office forecast that the city would add only 31,900 jobs this year. That is far below the roughly 100,000 jobs New York City created annually in the years before the pandemic.
The glum predictions reflect President Trump’s on-again, off-again tariffs, which went into effect this month, and a downward revision by New York City tourism officials for what was expected to be a record number of visitors this year. (The president’s repeated attacks on Canada, a top source of international tourism, led many to cancel trips or plan vacations elsewhere.)
Emily Eisner, the chief economist at the Fiscal Policy Institute, a nonpartisan research group in New York, said that Mr. Trump’s policies have only worsened the city’s prolonged and tepid recovery from the pandemic, led by a surge in low-wage and high-paying jobs with not much in between.
“When you see this economic stagnation and rents continuing to go up even though incomes aren’t going up, it’s a sign that things are really hitting the tipping point,” Ms. Eisner said.
On Tuesday, Kassandra White, a spokeswoman for Gov. Kathy Hochul, said: “Without stability, companies are not going to continue hiring. New Yorkers need our partners in Washington to put an end to the chaos and get serious about working with us to advance policies that grow our economy.”
On the other hand, William Fowler, a spokesman for Mayor Eric Adams, was upbeat about the city’s economy and future, saying that, “though these jobs numbers are consistent with the nationwide trend,” there was a record number of jobs and “our city’s economy and revenue base are performing incredibly.”
The city’s unemployment rate of 4.7 percent is higher than both the state and the national average. The rate is much higher for some segments of the city’s population, especially young workers.
Business owners in the city said they first noticed a decline in business around March and have since also faced escalating costs on goods and materials, with vendors citing tariffs as the reason. As a result, they have curtailed hiring.
Philippe Massoud, the executive chef and owner of Ilili, a Lebanese restaurant in Manhattan, said he started the year with the expectation of increasing revenue by about 4 percent; now, he is forecasting his first decline in 15 years, aside from the pandemic.
Mr. Massoud said his financial difficulties stemmed from three things: business uncertainty, rising costs from tariffs and lost revenue from no longer offering outdoor dining. He added that construction costs on a new restaurant he was building in New York City have jumped between 10 and 15 percent in recent months and suppliers have hiked prices on coffee, vinegar, wine and more.
His concern was shared across restaurants and bar owners in the city. A recent survey of 300 establishments by the New York City Hospitality Alliance, a trade group, found that a majority of them reported sales last quarter were below expectations. Half of them said they were pessimistic about business improving in the third quarter, citing “too few customers” as their top concern.
“I’m not adding to my staff because my revenues are shrinking,” Mr. Massoud said. “I can’t afford the payroll even if I wanted to.”
On the other side, job seekers in New York City say they are increasingly worried about long-term unemployment as their applications go unanswered. Some people who have been unemployed since last year said they had applied to hundreds of jobs, if not more, desperately trying to find anything that will provide an income.
“It’s very much up and down, but I’m trying to stay positive,” said Anthony Thomas, 37, who lives in Brooklyn and was let go from a tech job in March.
He said he had applied to about 40 jobs over the past month and received no interview offers. He has trimmed his expenses and broadened his job search to include remote positions at companies outside New York and positions that require less experience and offer less pay.
In the fiscal year of 2024, which ended in June, a little over 100,000 people in New York City received job assistance through the city’s Workforce1 Career Centers, including résumé and interview assistance, job training and referrals to open positions, the city said. That was a 10 percent increase from the previous period.
Souleyman Mohemd, who immigrated from Mauritania in 2023 and had been living in a city shelter for about a year, said he was referred to Workforce1 for help finding a job and creating a résumé. He was also connected with English classes at a library.
In December, he was hired as a cleaner at Daily Provisions, a chain of all-day cafes. “I feel better after I have this job,” Mr. Mohemd, 39, said.
Among New York City’s largest employment sectors, finance and insurance plays an outsize role in the city’s economy. The jobs pay an average of $387,000, more than three times the average annual wage of people who work in New York City. (The median household income of city residents is about $77,000.) Spending by financial industry employees underpins a disproportionate share of the city’s economy.
At the end of last year, firms had added nearly 30,000 finance and insurance jobs since just before the pandemic. But this year, they have lost 3,200 positions, and major companies like Goldman Sachs and Morgan Stanley have announced large layoffs.
In recent years, financial companies have expanded offices outside New York City in states that include Florida and Texas. Cromwell Coulson, the chief executive of OTC Markets Group, which runs a stock market, said he had recently received email pitches from mayors in Florida on moving his company out of New York City.
“Between Zoom and post-Covid, the flexibility of where people are in their offices is a real risk for New York City,” Mr. Coulson said. “Florida and Texas — they all want these industries there.”