Editor’s note: Below you’ll find the week 9 release of the NYC Recovery Index, originally published Sep 21, 2020. Visit the NYC Recovery index homepage for the latest data.
New York City’s economic recovery hit another pothole last week as a drop in subway usage and a slight decline in pending home sales offset improvements in other areas of the city’s economy.
New COVID-19 hospitalizations continue to decline, and job losses stabilized after increasing in the prior weeks, but more than six months since the pandemic was officially declared, New York City’s economic activity is still less than half of what it was before the pandemic, according to the metrics tracked by Investopedia and NY1.
COVID-19 Hospitalizations Decrease
As mentioned, new COVID-19 hospitalizations continue to decrease with an average of only 16 daily hospitalizations last week. Public schools have yet to welcome students inside their buildings, and the city announced last week that their return will be further delayed until October 1st. That may have helped keep new hospitalizations down. There were also reports last week that several investment banks had to re-close their offices after reopening them due to some employees subsequently testing positive for the virus. We do not know if those positive tests resulted in new hospitalizations, however.
Unemployment Claims Remain Steady
New unemployment claims are holding steady, as 36,465 New Yorkers filed for first-time unemployment claims last week. It was a decline of just 479 claims from the prior week, and was six times the same period a year ago. New monthly unemployment data for New York City for the month of August is due out this week, but with weekly claims at this elevated level, a steep drop in the July NYC unemployment rate of 18.4% is very unlikely. The job losses continue to be centered around the services industry, which includes hotels, restaurants, bars and other hospitality businesses.
Pending Home Sales Dip, But Remain Higher Than Last Year
Pending home sales, which we began including in the Recovery Index last week in place of new small business applications, have been a bright spot in the city’s economy. After a scorching summer of sales, pending sales—or homes in contract—fell slightly last week to 368, according to data from StreetEasy. That’s still higher than the same period a year ago, although the sales are not happening across all boroughs.
Brooklyn and Manhattan continue to lead the surge in sales last week, rising 25% and 13% year-over-year, respectively. Queens had been experiencing a recent spike in sales, but that ended last week, as pending sales fell 24% compared to the same period a year ago.
Subway Usage Declined
The delay in the return of public school students to October 1 held back an expected rise in subway usage last week. While public school kids were still officially online for orientation, many school administrators, teachers and staff likely did not go into their schools, given the announcement. This weekend’s A-Train derailment didn’t help matters much either, as subway lines experienced massive delays across NYC. Subway usage fell to just 25% of capacity last week, down from 29% the week prior.
Restaurant Reservations Stay Flat
New York City’s restaurants continue to struggle as dine-in restrictions remain in place until September 30. Indoor dining will be allowed to reopen at 25% capacity as of this weekend, while those restaurants that are able to offer outdoor dining are operating at only 30% of their capacity. Colder weather has rolled into the region, which may keep diners away. While restaurant reservations remained on par with the prior week, according to OpenTable, they are still down 80% from the same period a year ago.
The Labor Day weekend didn’t help New York City restaurants much, either. Major cities like Miami, Chicago and Boston saw big spikes in reservations over the holiday weekend, according to OpenTable, while New York saw a notable decline.
The lack of indoor dining has also hobbled New York City restaurants compared to other major cities. Miami, which permits 50% capacity indoor dining, has seen a stronger restaurant recovery than every other large city. Boston, which has no capacity restrictions provided that tables are six-feet apart, has also seen a surge in reservations. Chicago, which permits 25% indoor dining, has seen a more robust recovery, and Los Angeles, which does not allow indoor dining at all, has seen a larger increase than New York City.