The New York City Economic Tracker: May 29, 2023

The New York City Economy Tracker is a joint project between Investopedia and NY1, using publicly available data to evaluate the economic health of the city across a variety of metrics.

For the week of May 29, 2023, we’re looking into how New York City’s labor market has recovered since the COVID-19 recession, which industries drove job growth, and the industries that were most impacted by layoffs so far this year.

NYC Job Market Is Almost Fully Recovered From The Pandemic

The labor market in New York City has recovered almost all of the jobs lost due to the COVID-19 pandemic-fueled recession. As of April 2023, the city had an estimated 4.67 million non-farm employees on payrolls, only 0.85% lower than the January 2020 number of 4.71 million workers, according to seasonally-adjusted data from the Bureau of Labor Statistics.

However, job recovery in the city has slightly underperformed compared to nationwide employment numbers, which are now 2.35% above what they were in January 2020, as of the latest data from April. 

Although payroll growth has stalled since the beginning of 2023, the labor market has recovered a large number of jobs in a relatively short period of time compared to past recession losses, in what many economists call a “V-shaped” recovery.

Arts, Entertainment, Recreation, Hotels, and Restaurants Are Fastest Growing Sectors

When looking at which industries in the city have had the largest employment growth from last year, a handful of industries in arts, entertainment, recreation, hotels, and restaurants stand out. 

Specifically, promoters of performing arts, sports, and similar events, amusement and recreation industries, and the traveler accommodation industry saw a respective 35.9%, 13.7%, and 12.7% growth in payroll employment numbers according to data from the NY State Department of Labor.

The growth in these sectors is a sign that industries supplying pandemic-impacted services like dining out, entertainment, and traveling have played a major role in the recovery of NYC’s labor market. 

However, job growth in the city hasn’t been solely driven by recreation and accommodation services. Industries that provide management, scientific, and technical consulting services and home health care services have grown 16.5% and 13.4% year-over-year too, respectively.

NYC Labor Recovery Still Lagging Behind Other Big U.S. Cities

Although NYC’s labor market is doing fairly well considering the historic number of job losses over the pandemic, its employment gains lag behind compared to the next four largest cities in the U.S. According to the Bureau of Labor Statistics Local Area Unemployment Statistics, NYC still had over 4% fewer jobs in March 2023 compared to March 2019.

Of the five largest cities in the U.S., the only other city to not recover all of its jobs from four years ago is Los Angeles, which is still at 1.7% less than pre-pandemic levels. Meanwhile, Houston and Phoenix have 4.8% and 10.9% more jobs as of March 2023, compared to four years earlier.

State WARN Layoff Notices Provide Insight on Industries With Future Job Losses

Looking to the future, because employers are required to file Worker Adjustment and Retraining (WARN) notifications with the NY State Department of Labor, we take a look into which industries have been impacted by layoff notices in NYC this year, and will be in the near future.

Because of New York State’s WARN Act, covered businesses are required to provide early notifications of upcoming closures and layoffs to employees who will be affected. 

According to the WARN data, the information and financial activities sectors in the city have been the most impacted by layoffs this year, though they don’t make up a large portion of the overall NYC workforce.

Some of the largest contributors to the disproportionate share of layoffs in the tech, media, and finance sectors in NYC are: Meta, which will lay off 343 employees by July ’23, Google, which has laid off 887 employees since April ’23, and Goldman Sachs, which laid off 612 employees from January to June ’23.

About 41% of the 2023 year-to-date WARN layoffs have shown up in the NYC labor market data as of April 2023, with the other 59% yet to show up. However, in the city’s labor market overall layoffs have still not yet outpaced employment gains.