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NYC Businesses Vanish: Record Closures Hit Economy
16 Jan
Summary
- Nearly 5,000 businesses closed in the second quarter of 2025.
- Economic slowdown impacts NYC's labor market and business formation.
- Tariffs and rising costs are major factors in business failures.
New York City saw a dramatic downturn in business activity in the second quarter of 2025, with approximately 8,400 businesses closing and only 3,500 starting. This resulted in the largest net decline in business openings since early 2020, erasing nearly all start-up gains since 2022.
The city's economic rebound has softened, evidenced by a deteriorating labor market where private firms added significantly fewer jobs in the year leading up to November 2025 compared to the previous year. Experts attribute this to shocks businesses are experiencing, leading to owner uncertainty about the economy's future.
This economic trend presents challenges for Mayor Zohran Mamdani, especially as businesses faced increased costs from tariffs announced by the Trump administration. The decline was most pronounced in commercial districts and sectors like information and professional services, though the metropolitan area's job growth recently outpaced other US regions.
