When the Independent Budget Office and the city comptroller released their annual economic and budget review late last year, they projected that New York City would add about 40,000 jobs in 2025, mostly home health care jobs.
But when the final numbers came out in the spring, the state labor department said the city had actually lost 20,000 jobs — with a sharp reduction in home health care jobs.
Now a report from economist James Parrott says that the city in fact added 22,000 jobs last year.
What happened? According to Parrott, senior adviser to the Center for New York City Affairs at the New School, the state Department of Labor’s numbers on home health care jobs have been inaccurate for the last two years. What does it mean? It will be very hard to know what is happening with the city economy this year, which could affect everything from economic development efforts to projections of city tax revenues.
“Unless you make a hard adjustment in the data to correct for the misreporting of homecare jobs, we’re left with a distorted view of the city’s economy and job market,” Parrott said.
How Economists Track Employment
Every month, the U.S. Department of Labor asks 600,000 employers nationwide how many jobs they added or shed. That may not seem like a lot, but political polls routinely report who is ahead in a presidential race by reaching no more than 3,000 voters and often as few as 1,000. The New York City job numbers are based on the reports of the local employers.
In the spring, those numbers are revised based on unemployment insurance taxes paid by all employers. These numbers are more comprehensive.
What Went Wrong?
Home health care employment surged between 2022 and 2025 when the state began allowing relatives and friends to be paid for providing care to seniors and disabled clients under the state’s Medicaid program. The state also allowed 600 social service agencies to be involved to hire and pay them. It became very difficult to track how many people had been hired and where they were working.
In the spring of 2025, to control costs, the administration of Gov. Kathy Hochul established a single intermediary for the hiring of all health aides, which resulted in more precise data. Parrot says the new information showed that the labor department had overstated the number of those jobs in the city and understated those outside the city.
So, What Are the Real Job Numbers?
As a result, says Parrott, the city actually gained about 22,000 jobs, which — while much slower than in recent years — was considerably better than the national jobs increase in percentage terms.
Other economists who track the city’s economy told THE CITY they believed Parrott’s work was accurate.
A spokesperson for the state Labor Department didn’t return a request for comment.
What Does This Mean for 2026?
Since the revised 2025 state labor department numbers are not accurate, it will be impossible to compare the current number of jobs in New York City with 2025, leaving uncertainty in the official data about whether the city is actually gaining or losing employment.
For example, March data released last week showed the city has lost 37,000 positions over the last 12 months. But if the March 2025 job number is not correct, neither is the 37,000 figure.
Another Complication
The city comptroller has begun tracking private sector jobs excluding health care and social services. Meanwhile, government jobs are generally good paying ones — they count too.
How’s the economy?
“The city’s labor market lost momentum in 2025,” Parrott writes, “The unemployment rate and poverty rate are higher than before the pandemic.” He adds that the impact of higher tariffs, rising prices because of the war with Iran and anticipated job losses due to artificial intelligence suggest the labor market will be marked by instability and structural transformation.
The state comptroller’s office is also worried.
“The analysis just confirms what has become a recurring story on jobs — government and Wall Street are critical contributors amid a slowing job growth picture in the city,” said Rahul Jain, the deputy comptroller for New York City. “We are becoming more, not less, reliant on these sectors for job growth and some of the traditional ladders for entering and moving up through the wage ladder.”
Sectors like leisure, hospitality and construction “are showing softness,” he added.
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