Newly released employment data from April show that New York City’s private-sector growth slowed in 2025, especially toward the year’s end. This slowdown signals declining opportunities for New Yorkers and threatens to worsen fiscal problems for both the city and state governments.
The Current Employment Statistics (CES) program provides these data through a monthly survey of business establishments, offering the latest state and local employment information. Each year, the CES “benchmarks” these figures, adjusting the monthly survey results to match actual payroll changes found in employer reports. While this update usually occurs in early March, last year’s federal government shutdown delayed the process by a month.
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The city’s private sector added an average of only 13,000 jobs in 2025, bringing the employment total to just over 4.2 million—a sharp decline from 2024, when the city gained over 95,000 jobs. The private service-providing industries grew slightly more, adding an average of 21,000 jobs. But the “goods-producing” construction and manufacturing industries struggled, losing a combined 8,000 jobs.
Office-using industries, which form the backbone of the city’s business-tax base, remained relatively stable within the private service sector. Financial activities, including finance, insurance, and real estate, added 9,000 jobs, boosting employment to 514,900; professional and business services, such as law and accounting, lost 600 jobs, dropping down to 796,300; and management of companies and enterprises (head offices of firms with their major operations located elsewhere) gained 1,500 jobs, up to 80,400.
Other large service industries also showed little growth. Retail trade, with an annual average of 299,500 employees, gained just 100 jobs. Leisure and hospitality (entertainment, hotels, and restaurants), with 451,500 employees, gained 3,600.
Health care and social assistance—the private sector’s primary growth engine after the pandemic—added only 9,300 jobs in 2025, reaching a total of 1,007,900. This category includes hospital and doctors’ office employees and social-service providers. A steep decline in home-health-care services starting in April 2025 drove this slowdown. Though home health care is nominally private, New York State largely funds it through Medicaid. While employment in this subsector peaked at 333,800 in December 2024, it plummeted to 254,500 by December 2025.
State officials viewed New York’s unusually generous home-health-care program as fiscally unsustainable and believed that it likely provided services to many ineligible clients. In 2015, the state dramatically expanded the Consumer-Directed Financial Assistance Program (CDPAP), which paid home-care clients’ family members and friends to provide care. This led to skyrocketing costs and forced the state to take action. Starting April 1, 2025, officials designated a single fiscal intermediary to manage all funding for home-health-care workers. The change had an immediate dampening effect on employment.
As the home-health-care sector lost workers in April 2025, the individual and family services sector gained them, partially offsetting the decline. This category, which includes employees of largely government-funded social services agencies, grew from 236,200 in December 2024 to 285,800 in December 2025. State labor-market analysts may have artificially created some of this increase by reclassifying the employers of home-health-care workers.
These dramatic swings left health care and social assistance employment lower at the end of 2025 than its late 2024 and early 2025 levels. Because other job categories showed little growth, this decline dragged down overall private employment. By June 2025, private employment had already fallen below the previous year’s figures. However, the CDPAP policy change will only exert this influence briefly—after April 2026, peak home-health-care employment levels will no longer affect year-to-year private employment comparisons.
City and state officials should be more concerned about employment stagnation in the rest of the private economy. The office-based service industries need to grow faster to help relieve the city’s fiscal woes. Major supporting-service industries, such as retail trade and leisure and hospitability, also generate vital tax revenue and can employ many less educated workers for whom home health care is no longer a viable career path.
Politics-as-usual obscures straightforward solutions to the city’s employment stagnation. By lifting the many barriers to private investment, the city would encourage housing construction and allow both the population and labor force to grow. Making the Big Apple more affordable would attract an influx of workers—many of them highly educated—and motivate businesses to create high-productivity jobs in finance and business services. Finally, removing restrictions on new investments in retail and tourism would lead to a broader range of job opportunities across education and skill levels.
With the state budget and related legislation still under negotiation, the new jobs data highlight the potential negative effects of Mayor Zohran Mamdani’s proposed city tax increase. Even Mamdani acknowledges that slow job growth is a problem, though he has yet to propose any steps to remedy it. New York City is not immune to the effects of a hostile business environment, and growth cannot be taken for granted. Both city and state officials should take positive steps to make the city a better place for private employers to create jobs.