Editor’s Note: Below is the Week 5 version of the City Economic Recovery Tracker (CERT), originally released on January 14, 2021. Visit the CERT homepage for the latest data.
All five cities on the Investopedia City Economic Recovery Tracker (CERT) continued to see mixed economic recoveries in the week of Jan. 2. New York, Chicago and Columbus all saw gains in economic activity, while Los Angeles and Houston saw slight declines. Outdoor dining restrictions in Los Angeles continued to hamper the city’s economic recovery, while the high number of COVID-19 cases also raised concerns, especially as critical care capacity in the city is dangerously high.
Despite its overall weekly drop of two points, Houston is still seeing the strongest recovery with a score of 63. New York saw the biggest overall weekly change with an increase of eight points, joining Houston and Columbus as the three cities where the recovery economy is at least halfway to early March 2020 levels. Meanwhile, Los Angeles remains at the bottom of the cities on our index and has fallen further with a two-point drop and a score of 37.
LA still faces worst rate of COVID-19 cases
COVID-19 case rates in the five cities have been mixed, with cases decreasing in Columbus and Chicago and increasing in Los Angeles, Houston and New York. Los Angeles continued to see its case rate increase exponentially and averaged 142 new cases per 100,000 people during the week of Jan. 2, more than double the rate of Columbus’ second-highest city. . Los Angeles County has reported 959,000 cases of COVID-19 and 12,955 deaths as of Jan. 14. Many of the city’s medical facilities are overwhelmed, with a hospital’s intensive care unit at 320 percent occupancy.
Columbus and Chicago’s case rates have declined from earlier highs, though Columbus’ rate is still just below the April peak of 65 in New York. Either way, the speed at which Chicago and Columbus were able to reverse their rising case rates gives hope that Los Angeles could do the same in the weeks to come.
Vaccine distribution is well advanced, and about 10.3 million people in the United States have received the Covid-19 vaccine as of January 14, according to the CDC. Johnson & Johnson said its single-dose COVID-19 vaccine candidate elicited an immune response and was generally well tolerated by all study participants in early Phase 1/2a trials. The company plans to release phase 3 data this month and hopes to gain FDA approval for emergency use by March, which would make it the third vaccine approved in the United States after those made by Moderna and Pfizer.
Drop in unemployment claims in Chicago, New York
The rate of initial jobless claims varied from city to city. Rates for Columbus, Houston and Los Angeles have remained relatively stable and are still between 2.5 and 3.5 times higher than the same period last year. Meanwhile, rates for New York and Chicago have dropped significantly. For New York, in particular, the drop is not the result of a decrease in the number of people filing initial claims during the week of January 2, but rather an unusually high number of claims filed during the same period last year.
Chicago continued to see a nearly month-long drop in jobless claims and, for the first time in months, is not the city with the highest jobless rate.
The number of jobless claims nationwide rose in the week to Jan. 9 to 965,000, up 181,000 from the previous week and beating analysts’ expectations. President-elect Joe Biden released his economic plan today, which includes a $1.9 trillion COVID-19 relief package that will provide Americans with $1,400 stimulus checks. The economic recovery has been uneven in the United States, with low-wage earners struggling more than high-income workers. Unemployment for workers in the lowest wage quartile in the United States is likely above 20%, while the rate has fallen below 5% for the highest paid workers in the country, said Federal Reserve Governor Lael Brainard said.
Meal restriction continues to hurt LA
Los Angeles’ outdoor dining ban continues to keep the city’s restaurant index at zero, while other cities see increases in the number of restaurant reservations made during the week of Jan. 2. New York, despite having a similar indoor dining ban, has seen modest gains week over week.
Chicago and Columbus saw significant increases in bookings made week-over-week and are the only two cities more than half of early March 2020 levels.
The restaurant industry continues to struggle across the country as colder weather and rising COVID-19 rates deter customers. During the month of December, biggest job losses in the United States were in the leisure and hospitality sector, where 498,000 jobs were lost, with three-quarters of those losses coming from restaurants and bars.
Drop in transit scores
Transit numbers fell slightly week-over-week in every city for the week ending Jan. 2, erasing gains from the previous week. Columbus and Houston top the charts with indexes of 66 and 61, respectively, and are doing significantly better than Los Angeles, New York and Chicago, which are only halfway through the recovery.
The federal government has set aside funds to help cities with their transit systems and the latest Recovery plan committed $14 billion to struggling transit agencies nationwide.
Small Business Index Declines
The Small Business Index remains a bright spot for each of the five cities, although each city saw a drop in its score during the week of January 2. Columbus has the smallest drop of two points, while the other cities saw drops of between six and 10 points each. Los Angeles has a score of 72, while New York and Chicago occupy the bottom of the rankings with scores of 66.
The Federal Reserve released its beige book on January 13, saying businesses across the country continue to suffer due to the impact of the pandemic. “While the prospect of COVID-19 vaccines has bolstered business optimism for growth in 2021,” the Fed report said, “it was tempered by concern over the recent resurgence of the virus and the implications for short-term trading conditions”.
Donated by Amanda Morelli/Adrian Nesta. Additional reporting by Elana Dure.