Firms Skimped on Pay as Health Costs Soared: Fed Survey (1)

Businesses faced some of the sharpest cost increases in recent years in 2025, as more expensive health insurance prompted firms to hand out smaller pay increases, according to a recent survey by the Federal Reserve Bank of New York.

Costs for services firms in the New York-New Jersey region rose by 7% last year, up from 5.2% in 2024, and by 8.5% for manufacturers, up from 4.9%.

Health insurance costs were the biggest driver, rising by about 13% across services firms, and by almost 14% for manufacturers, the study found. Some firms reported increases as high as 50% when seeking ...