Headwinds hit New Hampshire’s economy

The economy, both nationally and in New Hampshire, entered 2025 with significant strengths and key challenges. Now, early data from the first half of 2025 suggests the state’s economy faces new uncertainties at a potential inflection point.

The long-term challenges to the New Hampshire economy, including housing affordability, child care accessibility, and the state’s demographic profile, continue to hold back economic growth.

Despite these challenges, both the state and national economies had a relatively favorable 2024. New Hampshire’s labor force grew faster than it had in any year since 2018, and labor market data suggested employers were having an easier time finding workers than they had in 2023 or 2022.

However, in the first half of 2025, job growth in New Hampshire appears to have stalled, with fewer residents reporting being employed and businesses in the state reporting no job growth. National economic indicators also show relatively tepid economic and job growth thus far in 2025, although jobs are still expanding nationally.

Available data suggests employers in New Hampshire are not laying off employees at a particularly fast pace, indicating that many businesses are likely holding off on hiring more people due to economic uncertainty. Recent job growth has been primarily driven by hiring in health care and social assistance jobs, while manufacturing employment and retail and wholesale trade jobs have been disappearing.

Residents may also be seeing costs outpace incomes. Between early 2024 and early 2025, inflation-adjusted personal income per person grew slower in New Hampshire (0.4%) than in Maine (1.7%) or Vermont (1.4%), while it remained essentially unchanged in Massachusetts. Average wages from work in New Hampshire appear to be slipping further behind rising consumer costs in 2025.

Labor force participation rose slightly during the last four quarters, with a growing number of Granite Staters working or actively looking for work. The number of open positions per unemployed worker in New Hampshire has fallen from a high of 3.5 in February 2022 to about 1.6 in June 2025. The unemployment rate has crept up in 2024 and 2025, and a broader measure of underemployment has risen to 6.3% in New Hampshire.

An easing labor force shortage may be welcome news for businesses seeking workers, but aggregate hiring appears to be on hold because of broader economic uncertainty. While there are no clear signs of an ongoing or imminent recession, if cost increases outpace income growth, Granite State businesses and residents already grappling with long-term challenges may find a slowing economy creates more difficult circumstances.

Phil Sletten is research director for the NH Fiscal Policy Institute. The NHFPI Policy Memo is a partnership of the NH Fiscal Policy Institute and NH Business Review.

Headwinds hit New Hampshire’s economy

New Hampshire’s 2025 economy faces stalled job growth, rising costs, and long-term challenges like housing and child care despite 2024 gains.

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