The Line: NYC's Employment Dips Slightly in July
Gregory Heym is Chief Economist at Brown Harris Stevens. His weekly series, The Line, covers new developments to the economy, including trends and forecasts.
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New York City lost 300 jobs in July, its second monthly job loss since May 2020. While this is a very small decline (-0.01% to be exact), compare that to the 943,000 jobs (+0.6%) increase for the U.S. in July and you may get a bit worried. We expected all along that the city’s recovery would trail the rest of the country’s, but we did not predict that employment growth would stall at this point.
Over the past year, employment gains in New York City have been led by the leisure and hospitality sector (+99,500) and education and health services (+72,600). Construction (-6,300) and financial activities (-9,000) were the only private-sector industries to lose jobs over the past 12 months.
While NYC’s unemployment rate ticked down to 10.5% in July, that’s almost double the national rate of 5.4%. That alone tells us the city’s economy has a long road ahead of it, but let’s look at how far we’ve come since April 2020.
So far, NYC has gained back 414,700, or 43%, of the 958,800 jobs it lost to COVID-19. That’s certainly progress, but how does that compare to the entire U.S.? Not too well, as the nation has recovered 16.7 million, or 75%, of the 22.4 million jobs it lost.
Where does the city go from here?
Well, the road to recovery has become much tougher, as the Delta variant has caused COVID-19 cases to spike again. The Partnership for New York City recently reported that just 23% of Manhattan office workers have returned, and only 41% are expected by the end of September. Many companies have announced that employees must be vaccinated to return to the office, and the city is now requiring proof of vaccination for most indoor events.
It’s reasonable to expect that both these factors will present challenges to the city’s economy, as it will keep workers from commuting into the city, and keep some locals from indoor dining, concerts, and other activities.
Expect employment growth in New York City to be uneven over the next few months for these reasons. But, it won’t last for long. I still believe the city will come back, even if it takes longer than the rest of the country.