Editor’s Note: Below is the Week 23 release of the NYC Recovery Index, originally published January 11, 2021. Visit the NYC Recovery Index Homepage for the latest data.
The new year brought renewed optimism as New York’s economic recovery continued to improve during the week of January 2. A decrease in unemployment claims, an increase in restaurant reservations and gains in the rental market have all contributed to the city’s recovery. However, COVID-19-related hospitalizations continue to haunt the city, while subway ridership is still less than half its pre-pandemic levels.
New York City’s recovery stands at 59.2 out of a total score of 100, according to the New York City Recovery Index, a joint project between Investopedia and NY1. The index rose 7.8 points from the previous week – the biggest jump in more than three months. Ten months into the pandemic, New York City’s economic recovery is just over half of levels at the start of March 2020.
Editor’s note: We’ve tweaked our unemployment index calculation slightly, retroactively changing the index score from last week. That’s why the week-over-week change of 7.8 comes out at 59.2 for this week instead of 60.9.
COVID-19 hospitalizations continue to climb
The number of hospitalizations in New York continued to increase during the week of January 2, with an average of 261 hospitalizations per day, compared to 250 average daily hospitalizations the previous week. This seven-day average is comparable to late spring rates and is more than five times higher than two months ago.
The high caseload comes as colder weather and relaxed social distancing practices over the holiday season have led to a new wave of COVID-19 cases across the country. New York City has recorded a total of 488,000 cases and 25,562 deaths as of January 11.
Trends in case numbers will be an important factor to watch as vaccine distribution continues across the country. New York opened vaccine enrollment to teachers, first responders, public safety and transit workers and New Yorkers age 75 or older on January 1.Governor Andrew Cuomo and Mayor Bill De Blasio have previously been criticized for slow distribution of vaccines as the virus surges So far, 1.2 million vaccines have been distributed in New York City, although only 434,802 people have been inoculated with the first dose.
Unemployment claims continue to fall
Year-over-year initial claims for unemployment insurance, while still high, fell significantly in the week of January 2. rates between 200% and 400% higher for previous weeks.
While this is an undisputed improvement, the number of future jobless claims largely depends on the length and magnitude of potential future shutdowns in New York, as well as the speed and efficiency the distribution of vaccines. Cuomo previously warned an economic shutdown of non-essential businesses in January was possible as COVID-19 cases hit record highs in the springHowever, he then proposed a rapid COVID-19 testing network to help businesses reopen with reduced capacity restrictions.“We simply cannot remain closed until the vaccine reaches critical mass. The cost is too high. We won’t have anything left to open,” he said. tweeted January 11. “We have to reopen the economy, but we have to do it smartly and safely.”
The Bureau of Labor Statistics reported that 140,000 jobs were lost in December nationwide as layoffs surged in the service sector due to tighter restrictions due to cold weather and the unmitigated spread of the coronavirus.
Home sales still hot
Pending home sales increased in the week of Jan. 2, with 366 homes entering contract, compared to 339 the previous week, according to data from StreetEasy. This measure continues to be a bright spot in New York City’s economic recovery, representing a 51% increase over the same period last year, when only 243 homes were under contract. Manhattan, Queens and Brooklyn all saw year-over-year increases of 41%, 35% and 6%, respectively.
Vacancies continue to fall
New York City’s rental market has been much more affected by the economic effects of COVID-19 than its housing market, according to the k-shaped recovery from the city. The city tells a tale of two housing markets: a market where landlords welcome a booming sellers’ market, while tenants struggle to post their next payment and are forced to give up or not renew leases they can no longer afford.
However, the rental market is improving as vacancy rates have steadily declined over the past few weeks, according to data from StreetEasy. There were just over 35,000 rental units available in New York City as of the week of Jan. 2, up from about 36,000 the previous week. However, the number of rental units available is still higher than what would normally be expected for this time of year.
In addition, commercial space rents in New York have fell to historic lows as struggling retailers closed shop and vacancies soared. These vacancies put intense pressure on owners to fill their empty storefronts. While asking rents have dropped significantly, taking rents are believed to be even lower, with some brokers citing average differences between asking and taking rents of around 20%.
As New York City continues to recover from the COVID-19 pandemic, the rental market is worth watching to see if there is an influx of people returning to the city in the summer of 2021 to offset the hundreds of thousands of departures in 2020.
Metro ridership is still down
Metro ridership continued to decline 67% year-over-year during the week of January 2, with an estimated seven-day rolling average of just over 1.18 million riders for the week. With ridership still down, the MTA has no plans to restore 24-hour subway service.Subway service between 1 a.m. and 5 a.m. was halted in May to allow deep cleaning of stations and equipment, ending 107 years of 24-hour service. Overnight passenger numbers fell to a low of around 10,000 at the start of the pandemic and have since rebounded to around 20,000 passengers, most of whom are essential workers.
Restaurant reservations see a modest bump
Restaurant reservations increased slightly in the week of January 2, although the number was still significantly below last year’s level. The estimated number of seated diners remained 87% lower than last year’s figure, according to OpenTable data, although this is an improvement from last week’s 92% drop. .
Continued spikes in COVID-19 and colder weather hampered booking gains. Additionally, Cuomo’s Dec. 14 ban on indoor dining has exacerbated the difficulties for the restaurant industry. Several restaurants have sued the state over these dining restrictions, citing the fact that only 1.43% of transmitted COVID-19 cases come from restaurants.
More than 1,000 New York restaurants have closed since late March, costing thousands of workers their jobs. The restaurant industry was not included in the latest $900 billion stimulus package signed by President Trump, which could threaten the survival of hundreds more restaurants. Still, the industry hopes the federal government will provide assistance before normal capacity can resume.