New York, whose diversified economy had fueled unparalleled job growth in recent years, is now facing a bigger challenge in recovering from the pandemic than almost any other major city in the country. More than one million residents are out of work, and the unemployment rate is nearly double the national average.
As the coronavirus surges again in the region, tourists are staying away and any hope that workers would refill the city’s office towers and support its businesses before the end of the year is fading. As a result, New York’s recovery is likely to be slow and protracted, economists said.
So far, New York has been regaining jobs slower than other big cities. As of September, employment in the city was still down more than 600,000 jobs from a year before, according to the state Labor Department.
In September, more than 2.3 million New York State residents were collecting unemployment benefits, said James Parrott, an economist with the Center for New York City Affairs at the New School. Of those, at least 1.3 million were city residents who were either out of work or severely underemployed, he said.
Those losses are concentrated in five key industries — restaurants, hotels, the arts, transportation and building services — that rely on travel, tourism and business activity, Mr. Parrott said. Workers at office buildings have been laid off, awaiting a return of professional service workers to their offices.
“A lot of those things which we had celebrated as having helped to diversify the city’s economy in the Covid economy turned out to be big liabilities,” he said.
Among the 51 largest metropolitan areas in the country, only two — Las Vegas and Los Angeles — had higher unemployment rates in August than New York, according to the federal Department of Labor.