Last May when Mayor Eric Adams presented his executive budget proposal, his administration forecast that the city would add 150,000 jobs in 2025.
Now, the administration admits the gain will be only about 40,000 jobs.
Worse, say other analyses, all the added jobs are coming from low-wage health care positions paid for almost entirely with tax dollars as hiring in the private sector stalls. The forecasts for job gains next year are almost as bleak, and a sharp rise in the Black unemployment rate shows how post-pandemic gains for many are fragile.
“We didn’t have a recession in 2025, but the economy is treading water, and the outlook isn’t good for 2026,” said Lauren Melodia, an economist at the Center for New York City Affairs at the New School. “One of the things that happens in an economic contraction is that precariousness increases for people who are already economically precarious.”
Wall Street is booming, with profits for this year expected to be more than $60 billion, a record. That will mean big bonuses early next year and a gusher of tax revenue to support both state and city budgets. Office leasing is the strongest in years, which some optimists hope means that finance and professional services companies plan to increase hiring next year.
But the whiplash of economic forces, ranging from President Donald Trump’s on-again, off-again tariffs, to major cutbacks in federal programs and uncertainty about the impact of artificial intelligence, are making companies reluctant to hire.
The effect is clearly in the city Independent Budget Office’s projections for the final employment numbers for 2025.
It sees modest gains in the information, finance, wholesale, private education and government sectors being completely offset by losses in the leisure and hospitality, professional services and retail trade sectors. Health care and social assistance jobs account for the entire gain of 40,900 jobs, the IBO predicts. New York City averaged an annual increase or more than 100,000 jobs since the recovery began in the spring of 2020.
Pay in home health care, which accounts for most of the jobs, averages $32,000 a year. Social assistance positions average $37,000, according to the year-end analysis from city Comptroller Brad Lander. These are among the lowest paid sectors in the city, whereas the average wage in private sector jobs is more than $100,000.
“We are not seeing mass layoffs or major upheavals in the job market, but other than home health care we’re not seeing a whole lot of growth either,” said Sarah Parker, senior research and strategy officer for the Independent Budget Office, “and there are industries like retail trade that are really struggling since the pandemic.”
Projections for 2026 are modest at best. The comptroller predicts an increase of 43,000 jobs, while the IBO sees a slight pickup to 55,000 jobs. The Adams administration, which issued a major report earlier this month that trumpeted “a resilient post-pandemic economy, showing a sturdy labor market, vibrant office market, and continued population growth and talent attraction” is the most optimistic in its projection — as has been typical — at almost 70,000 added jobs.
But even the administration called attention to the rise in the Black unemployment rate, which reached 9% in the summer, in an update to its major report. A Center for New York City Affairs analysis shows the gap between the white and Black jobless rates is 6 percentage points, wiping out much of the progress in the last two years on that measure.
Nationally, the Black unemployment rate rose to over 8%, which most experts attribute to the cutbacks in the federal government where Black workers, especially women, are heavily represented. The story in New York City, which has only about 55,000 federal jobs, is different.
“We haven’t seen a huge impact from federal cuts in New York City,” said Melodia. “What we are seeing are the beginnings of discriminatory practices in the labor market with the return of last hired and first hired and a climate where employers can be more discriminatory.”
Surveys by the social services nonprofit the Community Service Society show that Black New Yorkers say their biggest problem is the lack of steady jobs and reliable hours.
“Many of the people we survey who are not employed say they don’t have the work experience employers want,” said David Jones, chief executive of CSS.
He also notes that the percentage of Black youths who are not working or in school, which exceeded 25% during the pandemic, remains high. The administration of incoming mayor Zohran Mamdani needs to focus on both keeping more Black youths in school and developing programs that link high school graduates to work immediately, Jones added.
Melodia suggests that despite the pressures on the city’s budget, increases in pay in health care and social assistance jobs, held disproportionately by women or color, would boost consumer spending. Mamdani’s free child care plan would add thousands of new jobs, and it also calls for increased wages, which is why the cost is estimated as high as $8 billion a year.
One bright spot has been tourism, which has escaped damage from Trump policies that angered Canadians and prohibited travel from scores of countries. The city is on track to end the year with about 64 million visitors, about the same number who came in 2024. And while the economic impact of the forthcoming World Cup tournament has been exaggerated, it will bring tens of thousands of visitors who will be paying sky high hotel rates.
Wall Street’s health is primarily due to the boom in artificial intelligence both in the stocks of companies leading the sector and in the deals they are making — which could mean major gains in 2026, or a sharp contraction if those companies falter.
The office market gives the optimists hope that 2026 will turn out better than expected. Experts warned during the pandemic that remote work would send office values plunging, cutting into property taxes and leading to a “doom loop” in which declining tax revenue leads to service cutbacks that send businesses and residents fleeing the city.
Instead, surveys show that workers in New York have returned to the office more than in any other major city. Instead of a doom loop, the vacancy rate in commercial office buildings has fallen sharply to 15% — far better than in Chicago, San Francisco, Boston, Houston or Seattle.
“Firms are leasing office space and they are probably doing it for a reason and that provides some hope to pick up hiring,” said Jason Bram, an economist with the city comptroller’s office.
