Despite earlier reports indicating a massive contraction in New York City’s job market, a new economic analysis reveals that the city actually added 22,000 jobs last year. The discrepancy stems from massive miscalculations by the state Department of Labor regarding home health care employment over the past two years. Late last year, the Independent Budget Office and the city comptroller initially projected the addition of 40,000 jobs for 2025. However, final numbers released in the spring painted a grim picture, suggesting a sudden loss of 20,000 jobs driven by a sharp decline in the home health care sector.
Economist James Parrott, a senior adviser at the Center for New York City Affairs at the New School, has clarified that these official figures presented a severely distorted view of the local economy. The statistical confusion originated between 2022 and 2025, when a state Medicaid initiative allowed relatives and friends to be compensated for providing care to seniors and disabled clients through approximately 600 social service agencies. This highly fragmented system made tracking employment figures exceedingly difficult. In the spring of 2025, in an effort to control costs, Governor Kathy Hochul’s administration consolidated the hiring process under a single intermediary, yielding far more precise data. This new information showed that the labor department had previously overstated home health care jobs within the city limits while understating those in surrounding areas.
Parrott emphasized that without a hard adjustment to correct for this misreporting, policymakers are left blind, a vulnerability that could severely impact economic development efforts and city tax revenue projections. While the actual gain of 22,000 jobs represents a much slower growth rate compared to recent years, Parrott noted that the figure remains considerably better than the national jobs increase in percentage terms. Other prominent economists tracking the city’s economy have already expressed their support for Parrott’s revised findings, underscoring the urgent need for accurate data to understand the true trajectory of the city’s job market.
