Revelers gathering in Midtown Manhattan to ring in the new year.
Credit...Jacqueline Silberbush for The New York Times

New York City’s Economy Surged in 2024. A Trump Shake-Up Looms.

The city has made up much of the ground it lost amid the coronavirus pandemic. Donald J. Trump’s return to the White House could upend that recovery.

by · NY Times

New York City’s economy roared back to life in 2024, with record levels of employment and a tourism industry nearly returned to its prepandemic peak.

But uncertainty clouds the outlook for the new year, as the city braces for potentially dramatic policy changes under President Donald J. Trump, who has promised mass deportations of immigrants, high tariffs and a pullback on federal funding of city and state programs.

And some of New York’s gains, analysts said, belie a widening income gap and an affordability crisis that could worsen under the next administration.

There was an average of 4.15 million private sector jobs in New York City through September, the most ever, and 83,000 more than the prepandemic peak, according to a report by the city’s Economic Development Corporation. The city first recovered all of the jobs lost during the pandemic in 2023.

The share of New Yorkers who either had a job or were seeking one, a snapshot of the city’s economic vitality called “labor force participation,” rose to nearly 63 percent, the highest ever recorded. During the pandemic, the same measure dropped to a low of 52 percent, said Melissa Pumphrey, a senior vice president at the economic development group.

“The fundamentals for our labor force are strong,” she said. “And people, especially young people, want to live here.”

The city drew 65 million visitors in 2024, second only to the number of tourists in 2019, before the pandemic. The city is projecting a record high of 68 million visitors this year, Ms. Pumphrey said.

But the city has yet to recover in other ways. From April 2020 to July 2023, the city lost almost 550,000 residents, or more than 6 percent of its population, according to the census. And while jobs have returned, the largest growth has been in lower-income fields like home health care, said Lauren Melodia, the director of economic and fiscal policy at the New School’s Center for New York City Affairs, and an author of a new report released Thursday.

Here are a number of ways the city’s fortunes could shift in 2025.

Deportation Fears

Mr. Trump has vowed to seek the mass deportation of undocumented immigrants, including the 412,000 estimated to be living in New York City.

While any major deportation plans would likely face legal obstacles, even the specter of enforcement could have a chilling effect on businesses that employ both legal and undocumented immigrants, said David Kallick, director of the Immigration Research Initiative, a nonprofit think tank.

Roughly 3.1 million immigrants live in New York City, accounting for billions of dollars in economic output, according to the Initiative. More than a fifth of the city’s workers are immigrants, with an outsize role in industries like retail, hospitality, health care and construction, Mr. Kallick said.

“If you don’t have cooks and dishwashers, that also means there are no jobs for the waiters and the maître d’s,” he said. “That’s going to be bad for all workers, and certainly bad for the businesses.”

Immigrants have also been the biggest component of recent statewide population growth, said Jonathan Bowles, the executive director of the Center for an Urban Future, a policy think tank.

Immigration “is the goose that lays the golden eggs,” Mr. Bowles said, in terms of its benefits to both population growth and the economy, and any threat to it could derail the city’s recovery.

Karoline Leavitt, a spokeswoman for Mr. Trump’s transition team, said the president planned to “enlist every federal power and coordinate with state authorities to institute the largest deportation operation of illegal criminals, drug dealers and human traffickers in American history while simultaneously lowering costs for families and strengthening our work force.”

City Hall did not respond to requests for comment.

Federal Funding at Risk

The federal government provides over $100 billion to New York City every year, of which the vast majority, $87 billion, goes directly to residents in the form of Social Security income, Medicaid health benefits and food assistance, according to a December report from the city comptroller.

Those funds, which form a safety net for a wide swath of New Yorkers, could be squeezed under a Trump presidency, Ms. Melodia said.

But in the short term, she said, New York State can rely on $20 billion in reserves, which could be used to strengthen social programs in the city and beyond.

Even as the city’s economy has rebounded, more residents have struggled to afford basic needs. In 2023, one in four New York City children lived at or below the federal poverty line, according to the Center for N.Y.C. Affairs report.

Financial hardships during the pandemic have led to a greater demand for aid. In July 2024, nearly 560,000 city residents received government cash assistance, a 76 percent jump from enrollment in February 2020, Ms. Melodia said.

Youth Movement

One hopeful sign for the city’s recovery is its continued ability to attract young talent. Nearly 500,000 college students who graduated in or after 2021 were working in New York City last year, the most of any major city in the United States, according to the E.D.C. Los Angeles was a distant second, with less than half as many recent graduates joining the local work force.

But New York City’s youngest workers have also faced some of the biggest challenges. The unemployment rate of residents ages 18 to 24 was 13.6 percent in the third quarter of 2024, more than double the citywide rate, and up more than five percentage points since the start of 2020, according to the Center for N.Y.C. Affairs.

Part of the reason that New York City’s unemployment rate has risen, even as jobs have returned, is that a greater share of the work is being done by people who live outside of the city, Ms. Melodia said, leaving fewer opportunities for young residents.

“There are a lot of people who are getting boxed out of the economy,” she said.

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