“State of the NYC Economy Report” Shows Resilient Economy

Photo Courtesy of NYCEDC

New York City Outpacing Other Large Cities in Population Growth, Commercial Leasing Activity, and Return-to-Office Rates. Private Sector Jobs and City Tax Revenues at Record Highs

New York City Remains Top Destination for Young Talent, with More Than One Million College Students and Recent Graduates

Affordability Remains Defining Challenge, with High Cost of Housing, Childcare, and Food Pushing Middle Income Families Out of City

New York City Economic Development Corporation (NYCEDC) announced the release of its second annual “State of the New York City Economy” report, offering a data-driven analysis of a resilient post-pandemic economy, showing a sturdy labor market, vibrant office market, and continued population growth and talent attraction in the face of national economic uncertainty. The report also notes major economic challenges, including slowing job growth, and the loss of working, middle-class families to more affordable jurisdictions outside of New York City.

Key findings of the report include:

• Employment and labor force participation are at all-time highs, and the unemployment rate is improving: With over 4,261,000 private sector jobs as of August 2025, and over 152,000 more private sector jobs compared to February 2020, the private sector job market has more jobs than at any other time in the city’s history. The labor force participation rate was 61.7% in August 2025, just below the record high of 61.9% in December 2024, meaning a record high percentage of New Yorkers either have a job or are actively looking for one. At the same time, the unemployment rate has fallen from 5.6% in December 2024 to 4.9% in August 2025. The city has seen a geographic diversification of jobs since 2019, with the outer boroughs adding over 200,000 jobs in the past five years. This spread of jobs likely explains at least a portion of the increase in citywide labor force participation in recent years, as more jobs have moved closer to where people live.
• The New York City office market is improving, as vacancy declines and leasing recovers: Office leasing reached 97 percent of pre-COVID levels in the first half of 2025, and both Midtown and Midtown South office leasing have fully recovered. The New York City metro area leads all national metros in net office absorption over the past four quarters, meaning more square feet were leased than vacated here compared to all other metros.
• New York City continues to be the place where young workers want to live: More than 565,000 recent graduates from the classes of 2022 to 2025 are now working in the city, up from 490,000 the year before. Forty percent of these graduates studied at New York institutions, and a majority are women, pointing to the city’s role as a destination for early-career talent. 1 in 8 New Yorkers is either a college student or recent college graduate.
• Tax revenues are at all-time highs, and fears of a doom loop have dissipated: City tax revenues reached $90.1 billion in FY2025, not including funds from the state or federal government. City tax revenues have increased every year since FY2019 and are now nearly 30 percent higher than pre-pandemic.

In addition to positive signs, the report also analyzes economic challenges:

• Affordability pressures have intensified and remain a defining challenge for New Yorkers: Since 2019, according to the regional Consumer Price Index, overall inflation and housing costs in the New York City metro have both risen 24 percent, utilities 37 percent, groceries 27 percent, and childcare and tuition expenses 19 percent. Meanwhile, according to data from StreetEasy, asking rents have risen nearly 30 percent in the city, while an analysis from the state’s Office of Children and Family Services showed that citywide market-rate childcare costs have risen 43 percent. New York City has long been unaffordable for its low-income residents. Over the past five years, the city has become even less affordable for low-income families, and now middle-income families are feeling the affordability crunch as the cost of everyday essentials are rising. Collectively, these cost increases threaten the city’s livability and long-term competitiveness.
• New York City faces challenges in retaining middle-income families with young children: While New York City, on net, adds population ages 18-29 from the rest of the nation, New York City struggles to retain families with young children. In particular, in 2023, New York City lost, on net, nearly 50,000 residents ages 0-18 or 30-39. Compared to 2000, New York City has 80,000 fewer young families with children and nearly 700,000 more households who are either aged 55+, families without children, or single people. Primarily, middle-income families are leaving New York City for the surrounding suburbs, where housing, at least on a per square foot basis, is more affordable.
• Job growth is slowing in 2025, reflecting national trends: Job growth has slowed so far in 2025, with New York City’s private sector adding only 5,100 jobs in the first 7 months of the year; the city added 173,000 private sector jobs during the equivalent period in 2022, 41,600 in 2023, and 68,100 in 2024. This is not a trend unique to New York City; job growth has slowed in 2025 across the US and most large metropolitan areas including New York City.

Methodology

The research in this report uses data from local, state, and federal government agencies; from banks, consulting firms, and real estate firms, academia, and nonprofits; and from private companies that track data on real estate investments, and mobility. The report is primarily focused on 2025 data for New York City. In general, 2025 data is compared to 2024 for annual growth, 2020 is used for pandemic comparisons, and 2019 is used for pre-pandemic comparisons.

Each month, NYCEDC issues an Economic Snapshot, highlighting key data and metrics and measuring the strength of NYC’s economy from month to month. To stay informed on economic trends in NYC, sign up for NYCEDC’s Economic Snapshot.

About NYCEDC
New York City Economic Development Corporation is a mission-driven, nonprofit organization that works for a vibrant, inclusive, and globally competitive economy for all New Yorkers. We take a comprehensive approach, through four main strategies: strengthen confidence in NYC as a great place to do business; grow innovative sectors with a focus on equity; build neighborhoods as places to live, learn, work, and play; and deliver sustainable infrastructure for communities and the city’s future economy. To learn more about what we do, visit us on Facebook, X, LinkedIn, and Instagram.