The optimistic report adds a data point to a somewhat hard-to-decipher economic climate, which employers and workers alike are watching carefully. Last week, the U.S. gross domestic product contracted for a second quarter in a row—which can signal a recession—as inflation continued to soar and the Federal Reserve Board raised interest rates, tightening operating margins for businesses and making borrowing more expensive.
“After a year of record growth, our economy is slowing down,” Vice President Kamala Harris told New York City business leaders last week.
But the labor market appears not to have gotten the message.
Leisure and hospitality jobs increased by a nonseasonally adjusted 216,000 for the fiscal year that ended last month. Between April and June, New York City was adding jobs in the sector, which includes entertainment, arts, hotels and restaurants, at a pace of about 12,500 per month. As of June, the sector was still 12% below its pre-pandemic high of 456,700. Nationwide, the sector is much closer to its pre-pandemic level: down 7% last month compared with February 2020.
In both cases, the jobs coming back are precisely the jobs that were lost when many performing arts venues and hotels, for example, were closed for more than a year following Covid-19 shutdowns in March 2020.
The national numbers also showed impressive growth in high-paying industries in the office-work sector. Although New York City employers in the sectors largely have held on to staff during the pandemic, those in technology, e-commerce and finance have been steadily announcing layoffs during the past several months.
“The question is whether NYC will see growth in areas like professional services, information and finance that all increased at the national level,” said James Parrott, economist at The New School.
Recent trends call into question whether that will be the case. In June, for example, the city’s high-paying securities industry seemed to be doing well enough, with the number of positions up 0.5% year over year.
But zooming out changes the picture. From June 2021 to June 2022, U.S. securities jobs were up much more, increasing by 4.7%. That puts the city’s 182,500 Wall Street positions at a 30-year low for the city’s share of industry jobs: 17.6%.
Local unemployment data this week also showed a continued increase in initial unemployment insurance claims, Parrott pointed out, underscoring the reality that some city firms are downsizing.
The unemployment rate in New York was 6.2% in June. Nationally, the rate sits at 3.5%.