New York got some good news from that BLS revision

At the same time earlier this month that the U.S. Bureau of Labor Statistics released its headline-making preliminary estimate that U.S. nonfarm payroll employment as of March was 911,000 lower than previously reported, it also published preliminary annual benchmark revisions for states and large metropolitan areas. The standout by far was New York, with the BLS estimating that there were 109,600 more payroll jobs in the state in March than previously reported, and 102,800 more in the New York-Newark-Jersey City metropolitan area.

With the estimated benchmark revision for New Jersey coming in at plus 31,500, and the only other New York metro area for which the BLS reported data (Buffalo-Cheektowaga) showing a downward revision of 2,300 jobs, the great majority of the upward adjustment seems to have been in New York City and its New York suburbs, and I would guess that most of the jobs were in the city itself. We won’t know this for sure until next March, when the state and metro-area benchmark revisions are finalized and incorporated into the monthly jobs data, but it’s now looking as if New York City may have outpaced the nation in its recovery from the job destruction of the early days of the COVID-19 pandemic. Even in the prerevision data, it’s been getting quite close.

The unemployment rate for New York City residents, which is derived from a different survey and isn’t affected by the benchmark revisions, has also nearly converged with the national rate after running much higher since the beginning of the pandemic.

This recovery from a pandemic of which New York City was the global epicenter in March 2020 — and that hammered the city’s economy harder than anywhere else in the country — is remarkable. To go from "New York City is dead forever" to this in five years is quite the performance.

It does come with gigantic asterisk, though. Without huge gains in health care and social assistance employment, New York City would still be down 68,000 jobs since February 2020 — and of those health care and social assistance gains, 80% have been in home health care services and individual and family services, two closely related sectors that mainly employ low-paid home health and personal care aides.

As I wrote recently, and Bloomberg News has chronicled extensively, these job gains are mostly the doing of New York State’s Consumer Directed Personal Assistance program, in which those needing care (mainly the elderly) hire their own caregivers, who can be friends or family members but not spouses, and have them paid through the state Medicaid program. This is not in principle a bad idea and has clearly cushioned the blow from big declines in retail, hospitality and other services employment in the city. The growth has been so rapid, though, that there are lots of questions about the program’s oversight and fiscal sustainability. And while the Medicaid cuts in the Republican budget bill signed into law by President Donald Trump in July don’t directly target long-term care, they will make it even harder for the state to afford it.

The home-care employment boom has brought a sharp decline in the city’s relative wages. That is, before the pandemic, the average hourly wage in New York City was about 35% higher than the national average. Now it’s only 20% higher — and that in a city where the median rent was 64% above the national median in 2024, according to the Census Bureau.

New York’s wage premium does seem to have stabilized over the past year, which is good news. Also, if there are in fact big upward benchmark revisions to the city’s job numbers, they probably won’t be in home care. The monthly payroll numbers come from a survey of employers, the annual benchmark revisions from the Quarterly Census of Employment and Wages, which is based mainly on employers’ quarterly filings detailing their contributions to the federal-state unemployment insurance program. Preliminary QCEW statistics through March were released at the same time as the preliminary benchmark revisions, and they actually show slower growth in New York City home-care employment over the previous 12 months than the payroll-survey numbers do — implying that the upward revisions will be in other sectors (I did not do an exhaustive accounting of which sectors). The city may finally be emerging from its extreme dependence on home-care employment.

If it can avoid another downturn, that is. As is apparent in the first two charts above, New York’s jobs numbers have deteriorated slightly in the past month or two — payroll employment in the city fell by 7,500 in August, according to the preliminary, seasonally adjusted estimate from the BLS, and the unemployment rate rose to 4.9% in August from 4.7% in June. A potential upward revision of last March’s jobs numbers doesn’t really help with that.

This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. Justin Fox is a Bloomberg Opinion columnist covering business, economics and other topics involving charts. A former editorial director of the Harvard Business Review, he is author of "The Myth of the Rational Market."