Editor's note: Below you'll find the week 24 release of the NYC Recovery Index, originally published Jan. 19, 2021. Visit the NYC Recovery index homepage for the latest data.
The strong economic start for New York City in the first week of 2021 faded quickly by last week, as a rise in new unemployment claims and an increase in COVID-19 hospitalizations pushed the New York City Economic Recovery Index lower by a full 9 points. President-elect Joe Biden released his American Rescue Plan last week, a $1.9 trillion stimulus plan aimed at facilitating the U.S. recovery from the devastating economic and health effects of the COVID-19 pandemic. Should it be passed by Congress and signed into law once Biden takes office, it contains billions in aid for households, small businesses, renters, and cities and states.
New York City’s recovery stands at 50 out of a total score of 100, according to the New York City Recovery Index, a joint project between Investopedia and NY1. Last week’s decline wiped out all the 2021 gains, as what looked like a hopeful trend in unemployment abruptly reversed after New York City recorded an unusually low unemployment index measure last week. Ten months into the pandemic, New York City’s economic recovery is only halfway back to early March 2020 levels.
COVID-19 Hospitalizations Still Climbing
The number of New York City hospitalizations continued to rise during the week of Jan. 9, with an average of nearly 300 hospitalizations per day, up from 261 average daily hospitalizations the previous week. This seven-day average is the highest it’s been since May 3 and is almost 10-times higher than the rate recorded on Sept. 24. The high caseload comes as colder weather and relaxed social distancing practices brought a new wave of COVID-19 cases to the U.S. New York City recorded a total of 536,000 cases and 26,104 deaths as of Jan. 18. Staten Island, Bronx, and Queens were the boroughs with the highest case loads as of Jan. 1.
Case numbers will be an important factor to watch as vaccine distribution continues throughout the country. Gov. Andrew Cuomo and Mayor Bill De Blasio have faced criticism for the slow vaccine distribution in New York as the virus surges. However, Cuomo said the Trump Administration failed to deliver enough vaccines to New York, adding that he wants to buy more doses directly from Pfizer. So far 1.9 million vaccines have been distributed in New York and 671,311 people have been inoculated with at least the first dose. Biden’s American Rescue Plan will subsidize COVID-19 testing and vaccination programs across the nation, contributing $160 billion to pay for a national vaccination program that includes increasing COVID-19 testing and manufacturing more protective gear and supplies, among other things.
Unemployment Claims Soar
During the week of Jan. 9, New Yorkers filed over 10,000 more unemployment insurance claims compared to the previous week. This represented a significantly larger year-over-year percentage increase (299%) compared to the previous week (31%), bringing the measure back to late-2020 levels.
Future unemployment claims will largely depend on how widespread potential future shutdowns are in New York City and how quickly vaccine distribution and development can occur. Last week, Johnson & Johnson said its single-dose COVID-19 vaccine candidate induced an immune response and was generally well-tolerated across study participants in early Phase 1/2a trials. The pharmaceutical company hopes to release Phase 3 data later this month before gaining FDA approval for emergency use by March. If all goes as planned, Johnson & Johnson will provide the third approved vaccine in the U.S. after the ones made by Moderna and Pfizer.
In the meantime, the Biden administration proposed distributing an additional $1,400 in stimulus checks to Americans to help offset the economic burden faced by individuals across the country.
Home Sales Remain Bright Spot
Home sales remained the only bright spot in an otherwise gloomy week for New York City’s economic recovery. Pending home sales, or homes in contract, increased during the week of Jan. 9 and are up over 60% compared to the same period last year. Across New York City, 510 homes went into contract during the week of Jan. 9, compared to 366 the previous week and 208 at the same point in 2019, according to data from StreetEasy. Manhattan, Queens, and Brooklyn all saw year-over-year increases of 63%, 90%, and 46%, respectively.
Rental Market Still Struggling
New York City’s rental market continues to be more impacted by the economic effects of COVID-19 than the housing market, speaking to the k-shaped recovery of the city. Vacancies reversed course and started to ascend after a few weeks of declines. According to data from StreetEasy, there were approximately 39,000 rental units available in New York City during the week of Jan. 9, up from approximately 35,000 the prior week. The number of available rental units is about 50% greater than what would normally be expected for this time of year.
Under Biden’s American Rescue Plan, the continued eviction and foreclosure moratoriums, which were scheduled to end in March, have been continued through September in an effort to help those who are struggling to post rent and mortgage payments. As of January 2021, 14 million Americans had fallen behind in their rent, with another 11 million in danger of foreclosure.
Subway Ridership Slides
Subway ridership continued to decrease during the week of Jan. 9, as the rolling seven-day average was 70% less than last year’s average, down from 67% less the prior week, according to data from the MTA.
The MTA said on Jan. 19 that it will postpone a decision to increase metro fares by 4%, citing a possible $8 billion aid package from the Biden administration. The MTA previously announced the potential fare increase due to financial fallout from COVID-19.
Restaurant Reservations Still Falling
Restaurant reservations declined during the week of Jan. 9 as the estimated number of seated diners decreased 91% compared to last the same period year, according to data from OpenTable. The negative trend accelerated with Cuomo’s Dec. 14 restriction on indoor dining and erased most of the gains received during the slight comeback of outdoor dining in the summer and fall.
Over 1,000 restaurants in New York City have closed since late March, costing tens of thousands of workers their jobs. The Biden administration allocated $440 billion of his American Rescue Plan to communities, including grants and loans for small businesses. However, the question remains of whether this will be enough to help keep restaurants afloat until warmer weather returns or COVID-19 cases decline.
Article Sources
Johns Hopkins University & Medicine. "COVID-19 United States Cases by County." Accessed Jan. 19, 2021.
The New York Times. "Vaccine Rolls Out Slowly as Virus Surges." Accessed Jan. 19, 2021.
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