Read our full analysis for a more in-depth look at these trends.
Regional roundup: Defrosting in the Northeast
The labor market is heating up in parts of the Northeast, but a shrinking pool of workers could stall economic growth.
March 2025
Key takeaways
- The Northeast and Midwest are lagging behind the South and West when it comes to economic growth. However, the Northeast saw accelerating GDP growth in the first three quarters of 2024 and Bank of America aggregated credit and debit card data suggests the region has continued to rally, albeit with some weather-related disruptions early this year.
- Supporting the improving economy, we find wage growth has accelerated in the Northeast, according to Bank of America deposit data. Employment growth is rising for lower- and middle-paying industries, with employers likely competing for a diminishing workforce. At the same time, we find that higher-income households are returning to the Northeast, likely encouraged by return-to-office policies, especially in New York City.
- Looking ahead, the Northeast has seen less of a slowdown in the labor market than other regions, potentially helping the region catch up with growth seen in the South and Midwest. While the cost of living remains an obstacle, a strengthening labor market in New York, Massachusetts, Maine, and Vermont may provide a positive start.
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