New York City Economy: Cost of Living, Jobs, and Industries

New York City is the largest metro economy in the United States and one of the largest in the world. The metro area — which the federal government calls the New York-Newark-Jersey City CBSA — stretches across parts of New York, New Jersey, and Pennsylvania. It is the financial capital of the world, the U.S. capital of media and advertising, and a top global destination for tourism.

This is a plain-English tour of how the New York City economy works. For the state-level picture, see New York Economy. For the country-level view, see The State of the U.S. Economy and the broader Economy hub and city cluster.

How big is the NYC metro economy?

For example, recent metro GDP for New York-Newark-Jersey City has run around $2.1 trillion, according to the Bureau of Economic Analysis. That is bigger than most entire countries. Metro population is roughly 19.5 million, per the U.S. Census Bureau. New York City alone holds about 8.3 million of those people.

The biggest industries

A handful of sectors do most of the work in the NYC metro economy:

• Finance and insurance — Wall Street, the New York Stock Exchange, the headquarters of most major U.S. banks, and a huge cluster of asset managers and hedge funds.
• Real estate — both as an industry and as a share of GDP, because Manhattan and brownstone Brooklyn property values are so high.
• Professional services — law, consulting, accounting, and advertising are heavily concentrated in Midtown and Lower Manhattan.
• Media and tech — major newspapers, TV networks, streaming companies, ad agencies, and a fast-growing tech scene in Manhattan, Brooklyn, and Long Island City.
• Healthcare and education — NYU Langone, Mount Sinai, NewYork-Presbyterian, Columbia, and CUNY together employ hundreds of thousands of people.
• Tourism and hospitality — NYC is one of the most-visited cities on Earth.
• Trade and logistics — the Port of New York and New Jersey is the busiest container port on the East Coast.

Jobs and wages

Metro labor data is published by the Bureau of Labor Statistics New York office. For example, the NYC metro unemployment rate has typically run close to or a tick above the national average, with sharper swings than the country as a whole because of how exposed the city is to global finance and travel.

The minimum wage in New York City is well above the federal floor of $7.25. The latest city, Long Island, and Westchester rate is set by state law and is published by the New York State Department of Labor. Many large NYC employers pay well above that minimum just to compete for workers in an expensive labor market.

Cost of living

NYC is one of the most expensive metros in the country, especially for housing. For example, recent HUD Fair Market Rent for a two-bedroom apartment in the metro has run around $2,600 a month, with a wide spread — Manhattan and brownstone Brooklyn run far higher, while parts of the outer boroughs and northern New Jersey are noticeably cheaper. Current numbers are at HUD User.

The federal government tracks region-specific inflation data through the BLS New York-New Jersey region. NYC's CPI tends to run close to the national average, but the level of prices — what things actually cost — is among the highest in the country.

Taxes in NYC

NYC residents pay both a New York state income tax and a separate city income tax — one of only a few major U.S. cities that levies its own income tax on residents. Combined sales tax is 8.875%, made up of state, city, and a small transit-district piece. Property taxes are uneven across boroughs and building types but tend to be lower as a share of value than in nearby suburbs.

How the NYC metro fits into the national picture

When stock markets boom, NYC budgets boom along with them — Wall Street bonuses translate directly into city and state income tax revenue. When markets contract, the city feels it first. The city's industry mix is unusually different from places like Houston or Phoenix: NYC leans into finance, media, and professional services, while energy and manufacturing barely register. That tilt is why a strong year on Wall Street can lift the whole metro and why a weak one can drag everything from restaurant employment to apartment rents.

Why finance is so concentrated here

A lot of finance still happens in NYC partly out of habit. Once a critical mass of banks, lawyers, regulators, and exchanges set up shop in lower Manhattan, it became hard for any single firm to leave. The trading floors of the major exchanges, the headquarters of large U.S. banks, and the offices of the Securities and Exchange Commission's New York operations all sit within a short walk of each other. That density supports tens of thousands of related jobs in law, accounting, software, and consulting.

A note on the numbers

Numbers in this article change every quarter — always check the latest from BEA, BLS, and HUD User for the most current data on the NYC metro.