Prepared by Richard Plehn, Lisa Ann Pollakowski, Vanessa Ollarves, Steve Gardner
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THE U.S. AND NEW YORK CITY ECONOMIC OVERVIEW
- NATIONAL TRENDS
- The U.S. civilian labor force declined slightly from 170.0 million in June 2025 to 169.9 million in June 2026, while the unemployment rate increased from 4.1% to 4.2%. As a result, approximately 200,000 more people are unemployed than a year ago.
- Several factors may be contributing to the increase in unemployment. Ongoing geopolitical uncertainty, including the conflict involving Iran, has raised concerns about the direction of the economy and the potential for a recession, causing some employers to delay hiring. At the same time, broader adoption of artificial intelligence and automation may be reducing hiring needs for certain positions.
- NEW YORK CITY TRENDS
- In contrast, New York City’s civilian labor force expanded from 4.46 million to 4.49 million over the same period. The unemployment rate edged up from 5.2% to 5.3%, largely reflecting the increase in the number of people participating in the labor market.
- Despite the modest increase in the unemployment rate, approximately 23,000 more New Yorkers are employed today than a year ago, indicating continued job growth.
- NEW YORK CITY LOCAL ECONOMY IMPACT ON COMPANIES AND EMPLOYEES
- New York City’s employment gains have been supported in part by the expansion of the AI sector and by strong demand for professional services. As AI companies continue to grow, industries such as legal services and financial services have benefited from increased demand, supporting additional hiring.
- The city’s resilient job market and expanding office-based employment are contributing to what is likely to be Manhattan’s strongest office leasing year in more than two decades.
- NATIONAL AND LOCAL ECONOMY IMPACT ON LANDLORDS
- At the same time, many office landlords continue to face significant financial challenges. Higher interest rates have made refinancing more difficult, while many office buildings are being valued well below their pre-pandemic levels—often 40% to 50% lower than six years ago—creating ongoing pressure on owners and lenders.
