NYC and San Francisco job markets haven't rebounded from COVID

Places like New York City and San Francisco still have fewer workers now than they did before the pandemic, which continues to impact their labor market recovery, according to an analysis by the Federal Reserve Bank of New York out Tuesday found.

In the meantime, the Austin labor force has expanded 17% since February 2020, and in Phoenix it's up nearly 10%.

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The rise of remote work, as well as fewer office workers and tourists in downtown areas, has directly impacted the job growth in major metro areas, researchers found.

The pandemic caused an exodus from cities like New York, San Francisco and Los Angeles to other parts of the country. Though some employees have since then returned to these hubs, places that emerged as remote-work rising stars during the pandemic like Miami and Austin are still reaping the benefits from the pandemic rebalancing.

Despite having a smaller pool of workers, New York City saw an 0.3% increase in employment between February 2020 and March 2024, well behind the national average of 3.8%. Other parts of the state, including Long Island, Westchester and Poughkeepsie also saw slower employment growth or even a backslide.

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This comes as New York state's overall private-sector workforce hit a record 8.35 million in January, with private employment in New York City rising to a record 4.1 million, more than recovering private-sector losses incurred during the pandemic induced recession.

In California, employment is still down from pre-pandemic in the metropolitan areas of San Francisco and Los Angeles.

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The Villages, a retirement community in central Florida, saw the highest growth in employment, at 23.8%, driven by higher demand for real estate, construction and healthcare services. Growth was also in the double-digits in Austin and Phoenix, as well as metro areas in places like Texas, Georgia and South Carolina.

The big difference is that the New York recovery began at a much lower point than other parts of the country, said Jaison Abel, the head of Urban and Regional Studies at the Federal Reserve Bank's Research and Statistics Group. "New York City lost 20% of its employment base in just two months — I can't underscore just how massive that loss is."