Research Special Topics

Signs of Progress: NYC’s Economic Recovery

August 2023


The city’s economy is on solid footing, bolstered by slow but steady progress toward full private sector employment recovery, strong new business growth, the gradual return of tourism, and better-than-expected tax collections. High unemployment among young residents and New Yorkers of color undermines an inclusive recovery while lapsing federal aid and new spending pressures cast uncertainty over the city’s longer-term fiscal outlook.

New York City private sector employment remains just shy of its pre-pandemic peak despite three consecutive months of job gains.

  • New York City employers added 5,600 jobs in July, bringing total private sector employment to a pandemic-era high 4.1 million, 3,400 fewer jobs than the pre-pandemic peak in February 2020.
  • Employers added 26,300 jobs between April and July, due primarily to robust hiring in the health care sector, which added 26,800 jobs over this period.
    • The city’s information sector cut 15,500 jobs over the same period as motion picture and sound recording employment declined, likely due in part to the ongoing strike of Hollywood writers and actors that has shut down film and television production.

Recent job gains follow on the heels of a year of strong business formation.

  • At the end of 2022, the total number of businesses in New York City was just 3,000 below the pre-pandemic high (98.5% recovered), according to data from the New York City Economic Development Corporation.
  • About 29,000 new businesses formed in 2022, including 5,200 in Q4 2022.
    • One in seven New York City businesses was started in the last year.
    • 2022 business growth was strongest in the accommodation and food services sector.
  • North Brooklyn has led the city’s business recovery and experienced net growth during the pandemic, while the total number of businesses in Midtown and Lower Manhattan remains down compared to 2019.

Businesses are posting fewer jobs as employment returns to pre-pandemic level.

  • New York City employers listed an average of 169,400 full-time job postings in the three months ending July 2023, down 19% from 209,100 in the three months ending July 2019 and down 28% from 235,200 in July 2022.
  • In July, 10.1% of job postings were for roles that could be filled by fully remote workers, up from 2.3% in July 2019.

Despite recent job gains, the city’s unemployment rate remains stubbornly high, due partially to an influx of job seekers to the labor market.

  • 5.3% of the city’s labor force was unemployed in July, down slightly from 5.4% in June.
  • The city’s unemployment rate bounced between 5.3%-5.4% in the first half of 2023.
  • The city’s labor force swelled to 4.2 million in July, the most since March 2020, when 4.3 million city residents were employed or actively seeking employment.
    • The city’s labor force participation rate—the share of the population that is working or actively seeking employment—hit a record 62.7%, although the increase is partially caused by a decline in the city’s population since 2020.

Unemployment is highest among young, Black, and Hispanic New Yorkers.

  • 53,300 unemployed young workers aged 16 to 24 in New York City as of July 2023, up 32% from 35,000 in July 2019.
  • The unemployment rate among Black (6.5%) and Hispanic (7.8%) New Yorkers is significantly higher than that of white (3.4%) city residents as of July 2023.

New York City tax collections in fiscal year 2023 exceeded projections made in June 2022 by $5.2 billion, due primarily to better-than-expected personal income ($1.9 billion), corporation ($1.3 billion), and sales ($921 million) tax collections.

Domestic migration patterns to and from urban neighborhoods in the New York metro area are recovering quickly and are on pace to return to pre-pandemic trends in 2023.

  • The New York metro’s urban migration recovery has outpaced that of the San Francisco, Los Angeles, Phoenix, Seattle, and San Diego metros, according to new analysis of credit history data conducted by the Federal Reserve Bank of Cleveland.
  • New York had persistent and growing net migration losses pre-pandemic.

Inflation in the New York metropolitan statistical area (MSA) ticked up to 3.2% in July 2023 from 2.5% in June but remains well below the peak of 6.7% in June 2022.

  • New York MSA inflation kept pace with the U.S. city average (3.2%) in July.

New York’s startup ecosystem continues to gain on the Bay Area despite cooled funding activity.

  • New York City companies secured $9.6 billion in venture capital (VC) funding in the first half of 2023, down 50% from the first half of 2022 ($19.2 billion) and down 57% from 2021 ($22.2 billion) but up from 2020 ($8 billion), per Pitchbook.
    • The city’s funding decline echoes national trends—U.S. funding in the first half of 2023 declined 44% from 2022 and 46% from 2021 but increased 8% compared to 2020.
  • Despite slower dealmaking in the New York metro area relative to the first half of 2022, New York is on pace to surpass 2,000 deals for the third consecutive year and is increasing its U.S. deal count share as the Bay Area’s share declines.
  • Startups with all-female founder teams based in the New York metro area secured 974 VC funding deals between 2019 and Q2 2023, the most of any metro; the Bay Area was the second-most active metro for female-led startup dealmaking with 727 deals.

The largest VC funding deals completed by New York City-based startups in Q2 2023 include:

  • $350 million for Amplify, an educational software startup
  • $250 million for Ambient Fuels, a renewable energy solutions provider
  • $200 million for Kite, a commerce platform
  • $191 million for Runway, a developer of AI creative tools
  • $112 million for Tourmaline Bio, a developer of immune disease medicine

Over 4.5 million international travelers passed through New York City area airports in June for the first time since 2019—a promising sign for the city’s tourism-dependent hotels, restaurants, and arts institutions.

  • Passenger volumes in New York City area airports—which includes JFK, EWR, LGA, and SWF (New York Stewart International)—reached 12.5 million in June 2023, or 99% of June 2019 airport traffic.
  • 85.1% occupancy rate in New York City hotels for the four weeks ending July 22, down 4.2% from the comparable period in 2019, according to CoStar, a global provider of real estate data, analytics, and news.
    • Total demand for city hotel rooms was 10.9% lower than the same period pre-pandemic.
    • Note: Temporary and permanent hotel room closures may affect comparisons of occupancy rates.
  • 306,200 average daily visitors to Times Square in July, down 24% from 403,700 in July 2019.
  • Broadway shows attracted 257,200 theatergoers and grossed $31 million in sales during the week ending July 23.
    • Attendance and sales were down 6% and 7%, respectively, from the equivalent week in the 2019 season.

Recovery of weekday ridership in the city’s transit system has stalled at around 66% of pre-pandemic across modes; car ridership has fully recovered.


In contrast, the summer months have accelerated the recovery of weekend ridership, which already outpaced weekday ridership. In July, weekend subway ridership hit 80% of pre-pandemic, Metro-North reached 84%, and the Long Island Rail Road reached 98%.