NYC’s Economy Is Strong. So Why Does It Feel So Uneven?

New York City’s economy is sending some contradictory signals. Tax revenues have been stronger than expected, Wall Street has had a banner year, and office leasing is running at a record pace. At the same time, job growth has slowed, affordability remains a defining challenge, and the City faces significant budget gaps in the years ahead.

The Comptroller’s Office economics team spends a lot of time looking at how those pieces fit together, and what national and global trends could mean for New York in the months and years ahead. In a recent conversation with NY1, Comptroller Mark Levine shared some of that analysis: where the City’s economy is strong, where the vulnerabilities are, and what policymakers should be doing now to prepare for a more uncertain future.

A few takeaways from the conversation, and some additional context:

• NYC’s overall economy is strong, with tax revenues above expectations, a great year on Wall Street, and office leasing at a record pace. But that strength is unevenly shared. Wealthier New Yorkers have benefited from strong financial markets, while working- and middle-class New Yorkers continue to be squeezed by record rents and a high cost of living.

• The City also faces significant fiscal challenges ahead. One-shot measures helped balance this year’s FY27 budget, but an FY28 gap of roughly $7 billion, combined with geopolitical instability, shifting federal policies, AI, and the affordability crisis, means there is more work to do to put the City on sustainable fiscal footing.

• AI is one of the biggest unknowns in NYC’s economic outlook. Our office’s report from May laid out five potential scenarios, ranging from significant economic gains to severe disruption. AI is helping drive financial markets and office leasing in New York, but the City’s exposure to finance also means a major correction in AI-related investment could pose risks.

• The City should put more money away in the Rainy Day Fund to give New York a stronger cushion against an economic downturn or unforeseen crisis. The Mayor’s 2.5% spending reduction target for City agencies in each year of the Financial Plan from FY27 to FY30 can also help create more flexibility and reduce reliance on continued strong revenues.

• The new “pied-à-terre tax” will likely meet its $500 million annual revenue target, according to the Comptroller’s Office’s most recent analysis. There is uncertainty about how owners will respond to the tax, but our estimate accounts for potential behavioral changes. Other experts place revenues just below the $500 million target.

• International tourism — which typically contributes more to NYC’s economy than domestic tourism — remains below where it should be, even after the City hosted major global events like the World Cup. Federal immigration and economic policies are among the factors weighing on international travel.

New York City remains a global center of commerce, finance, innovation, and culture. Keeping it strong through an uncertain period means working on three fronts at once: building an economy that creates real affordability and economic mobility, closing structural budget gaps, and strengthening the City’s ability to weather whatever challenges may come next.