Editor's note: Below you'll find the week 34 release of the NYC Recovery Index, originally published March 30, 2021. Visit the NYC Recovery index homepage for the latest data.
New York City’s economic recovery reversed course during the week ended March 20 and slumped back to a level seen two weeks prior. The regression was driven by a correction in home sales and a lackluster unemployment claims rate. New York City’s economic recovery continues to largely depend on vaccination rates and how quickly the city’s businesses are allowed to fully reopen. However, New Yorkers are hopeful that the recovery is near now that all city residents aged 16 and above are eligible for a vaccine starting April 6.
New York City’s recovery stands at 54.8 out of a total score of 100, according to the New York City Recovery Index, a joint project between Investopedia and NY1. The index decreased 3.2 points from the prior week and returned to a similar level from two weeks ago. More than one year into the pandemic and New York City’s economic recovery is still only a little more than halfway back to early March 2020 levels.
Covid-19 Hospitalizations Decline
The number of New York City COVID-19 hospitalizations decreased week-over-week. New York City reported an average of 236 hospitalizations per day for the week of March 20, down from the 259 average daily hospitalizations the previous week. The seven-day average now sits at a level similar to what was seen in mid-December. New York City recorded a total of 840,000 cases and 31,117 deaths as of March 30.
Case numbers will be an important factor to watch as vaccine distribution continues throughout the state. New York has so far administered 9 million doses statewide, according to the CDC. Gov. Andrew Cuomo announced Monday that New Yorkers aged 30 and above can begin to schedule appointments and get vaccinated starting March 30, while New Yorkers aged 16 and above can do so beginning April 6.
Unemployment Claims Increase
Unemployment numbers for New York City have increased during the week of March 20, reversing the mostly downward trend for the past seven weeks. During the week of March 20, 18,319 New Yorkers filed for unemployment, up 254% from the same period in 2019. This is a larger increase than has been seen in previous weeks.
New York City reported a 13.2% unemployment rate for February, higher than the statewide rate of 8.9% and above the nationwide rate of 6.2%. Other large metro areas like Los Angeles and Chicago have unemployment rates of 10.9% and 8.8%, respectively.
Unemployment numbers will likely only significantly drop once vaccination rates rise and businesses are able to fully reopen. Though the unemployment claims rate increased during the week of March 20, this was the third consecutive week that New Yorkers filed less than 20,000 raw claims in NYC, a positive sign of a sustained rate that is lower than any point during the pandemic. The expansion of NYC’s vaccination eligibility will hopefully accelerate the downward trend of unemployment claims.
Home Sales Decrease
During the week of March 20, the percentage of pending home sales, or homes in contract, decreased week-over-week, returning to the level experienced two weeks ago. There were 695 home sales during the week of March 20, representing a smaller year-over-year percentage increase (60%) compared to the previous week (71%), according to data from StreetEasy.
Nonetheless, the home buying market continued to be the only index measure that is performing better than it had in 2019, and this appears to be part of a larger nationwide trend of increases in home buying. New York City’s reopening is drawing back families who are interested in buying larger spaces. Manhattan, Brooklyn, and Queens all had year-over-year increases of 76%, 78%, and 13%, respectively. Only Brooklyn saw an increase in home buying movement week-over-week.
Rental Vacancies Continue to Drop
New York City’s rental market continues to be more negatively impacted by the pandemic than the housing market, and the percentage of units available to rent has continued to drop week-over-week. The number of rental vacancies in New York City declined week-over-week to 34,155 during the week of March 20, from 34,736 the week prior, according to data from StreetEasy. This drop pushed the index score up another point to 51.
As New York City continues its economic recovery, it will be important to watch the rental market to see if people return to New York City after leaving in 2020 for the suburbs or other cities with lower costs of living.
Subway Ridership Remains Flat
Subway ridership was relatively stagnant during the week of March 20 as the rolling seven-day average was approximately 65% less than the average during the same period in 2019. The MTA reported that just under 1.62 million New York City riders used public transport during the week of March 20, marking the seventh consecutive week of stabilization or improvement.
The Biden administration’s American Rescue Plan allocated more than $6 billion in federal funding for the MTA. The funding is crucial as the MTA works to bring back ridership and recover from the pandemic, preventing service cuts and layoffs as the agency continues to face deficits.
Restaurants Face a Setback
Restaurant reservations declined slightly during the week of March 20, as the industry sits in limbo waiting for restrictions to be lifted, vaccination rates to increase, and weather to improve. The estimated number of seated diners was 77% lower than the same period in 2019, compared to 75% lower the previous week, according to data from OpenTable. New York City restaurants are limited to 25% indoor capacity, while the rest of the state is allowed to have indoor capacity of 75%.
Future reservations in the city will depend largely on a decline in COVID-19 cases and warmer weather since some diners still prefer to eat outdoors. The industry is receiving $25 billion through the American Rescue Plan to help offset the economic burden until normal capacity can resume.