Long Island's unemployment rate hits 3.4% in May, third consecutive month of increases

For three months in a row, Long Island’s unemployment rate has seen year-over-year increases, puzzling economists who are observing high levels of job growth in other key labor metrics.

Long Island’s unemployment rate went up to 3.4% in May, an increase of 0.5 percentage points from the same month in 2023, according to data released by the state Labor Department on Tuesday. In both April and March, the local jobless rate also was up from the same months in 2023.

While increases in the unemployment rate are common and can even signal broader economic growth depending on underlying factors, May’s numbers paint a different picture.

Last month, the Island’s labor force — the total of all employed and unemployed residents actively looking for work — shrank by 18,400 from May 2023. At the same time, the number of employed Islanders fell by 26,300, while the number of unemployed locals grew by 7,900.

On a month-to-month basis, the jobless rate also grew, increasing from 3.2% in April. 

“The deterioration in the unemployment rate is concerning and it’s something we’re going to keep our eye on, but we’re not going to say there’s a total deterioration in the labor market on Long Island,” said Shital Patel, labor market analyst for the state Labor Department's Hicksville office. “All of the other data we have don’t point to that.”

In contrast, the number of jobs on Long Island in May grew by 19,300 from the same month last year, according to state figures released late last week. Leisure and hospitality, a major employer during the summer months, reported record levels of employment, growing by 6%, or 8,000 jobs, in May, year-over-year.

If the local economy were in dire straits, economists would expect to see similar trends in both the number of new jobs and the jobless rate. In many ways, the two metrics seem to point in opposite directions, Patel said.

“It’s hard to say that things are getting bad when one of the major reports are looking pretty good,” Patel said.

While the unemployment rate has been showing a concerning pattern, Patel pointed out that the Island’s jobless rate is still well below the 4% rate most economists consider full employment.

“The Nassau and Suffolk unemployment rate, on a relative basis, is lower than the rest of the state,” said Steven Kent, an economics professor at Molloy University’s business school. “I would view that as positive and points to the strength of the economy here on Long Island.”

The jobless rate statewide was 4.2% last month, up from 3.9% in May 2023, according to state data.

Although it’s not evident why the Island’s job numbers and unemployment are going in different directions, Kent said, it’s important to acknowledge how low even the rising jobless rate is.

“A 3.4% unemployment rate is still towards the very low end of what we’ve seen historically,” he said.

On the Island, the municipalities with the highest unemployment rates were the villages of Freeport and Hempstead, both at 4.1%. The local areas with the lowest jobless rate were the towns of North Hempstead and Oyster Bay, both at 3.1%