As National Headwinds Hit NH Economy, Unemployment Rises And Costs Climb: NHFPI Study

By Phil Sletten, NHFPI, InDepth NH

CONCORD, NH — New Hampshire’s economy is showing signs of strain as national headwinds collide with longstanding state challenges, according to a new study from the New Hampshire Fiscal Policy Institute. Rising prices, stalled job growth, and changing trade policies are compounding persistent issues such as housing shortages, child care barriers, and demographic shifts – raising questions about the state’s economic trajectory.

The study, Headwinds Hit the New Hampshire Economy, draws on data from federal and state economic surveys, unemployment insurance claims, housing prices, and migration statistics to examine the first half of 2025.

The analysis finds that, while health care and private education job growth remain resilient, industries tied to consumer goods, tourism, and manufacturing may be weakening. At the same time, average inflation-adjusted income per Granite Stater rose $359 in early 2024 to early 2025, lagging behind Vermont (+$1,006) and Maine (+$1,143), and average hourly wages in New Hampshire trailed inflation in 2024 and thus far in 2025. While still low, the estimated unemployment rate in New Hampshire has reached its highest level in nearly a decade outside of the COVID-19 spike, and underemployment has risen substantially. The study concludes that these trends taken together suggest New Hampshire may be reaching an economic inflection point where fewer job opportunities, slower income growth, higher costs, and long-term structural challenges converge.

“These data show stalled job growth and a rise in unemployment, raising questions about whether national economic headwinds including higher trade costs, could begin to erode the gains Granite Staters have made in recent years,” said Phil Sletten, Research Director at the New Hampshire Fiscal Policy Institute. “No definitive evidence of an ongoing or imminent recession exists, and some of these data may be revised in the future, but the information available is consistent with a slowing economy nationally and in New Hampshire.”

Key findings from the analysis include:

• Employment: Job growth in New Hampshire stalled in the first half of 2025. With more people entering the workforce but fewer being hired, the unemployment rate climbed to its highest level since 2015 (excluding the COVID-19 spike) as more people who were looking for work had trouble finding it. About 23,600 Granite Staters were unemployed in the first seven months of 2025, up from an average of 19,800 in 2024. A broader measure of underemployment also rose substantially during the last two years to 6.3 percent in the year ending June 2025.
• Labor Market Shifts: The most recent job losses, based on preliminary data subject to revision, were concentrated in industries tied to tourism, trade, and discretionary spending, including restaurants, retail, and arts and recreation. At the same time, the health care and private education sectors continued to add jobs. Manufacturing jobs, which saw losses in 2024, may have stabilized in early 2025, but the construction sector did not appear to grow. While workforce shortages constrained growth for most of the last decade, the labor force grew by about 1.3 percent in 2024 to 771,600 – its fastest growth since at least 2018 – helping ease those shortages even as job growth has slowed and opportunities appear harder to find. Job growth in New Hampshire was faster than in neighboring states over the last year, but slowed considerably in the first six months of 2025, falling behind Vermont’s rate and paralleling a decline in Maine while employment held steady in Massachusetts.
• Immigration and Demographics: New Hampshire’s population growth depends heavily on people moving into the state. Between 2010 and 2024, international migration added a net 42,200 residents, while domestic migration from other U.S. states added about 41,000. These inflows have offset the fact that deaths have outnumbered births every year since 2016. At the same time, New Hampshire is aging faster than most other states, and more than 200,000 Granite Staters are now within ten years of traditional retirement ages.
• Rising Costs and Tariffs: The federal government raised the overall tariff tax rate from 2.4 percent in January 2025 to about 18 percent in August. Analysts estimate the average taxpayer will pay an additional $2,700 in 2026 due to these policies, with the burden likely falling most heavily on lower-income households.
• Income Growth Falling Behind Neighbors: Average wages from work in New Hampshire fell behind inflation in the first seven months of 2025. Personal income in New Hampshire, counting all sources of income, grew slightly faster than inflation in the last year, but at a slower pace than in Vermont and Maine. Between the years ending in early 2024 to early 2025, income per person rose just 0.4 percent ($359) in New Hampshire, compared to 1.4 percent ($1,006) in Vermont and 1.7 percent ($1,143) in Maine. Massachusetts saw essentially no change relative to inflation.

The analysis warns that these conditions may mark a turning point. “Employment growth in New Hampshire appears to have at least stalled, and national employment growth has slowed significantly. Economic uncertainty, particularly associated with trade and immigration policies, could be giving businesses reason to pause expansion in the face of higher costs, and consumers may see more price increases for imported goods. The combination of higher prices and a job market that offers fewer opportunities, particularly for increases in compensation that outpace overall inflation, could leave many Granite State families in more difficult economic circumstances,” the analysis notes.

“These findings underscore the importance of monitoring shifting economic conditions both within and beyond our state’s borders to understand how they could affect Granite Staters,” Sletten added. “The data make clear that long-term challenges like housing and child care, and new pressures from trade policies and a slowing job market, pose real risks for New Hampshire families and businesses.”

You can read the full analysis, Headwinds Hit the New Hampshire Economy, at https://nhfpi.org/resource/headwinds-hit-the-new-hampshire-economy/.

This article first appeared on InDepthNH.org and is republished here under a Creative Commons license.