The City Economic Recovery Tracker: Week of Dec. 7

Editor's note: Below you'll find the week 1 release of the City Economic Recovery Tracker (CERT), originally published Dec. 9, 2020. Visit the CERT homepage for the latest data.

The economic downturn across the U.S. brought on by the pandemic was sudden and all-encompassing, as demonstrated by near-vertical drops in transit, dining, and other indicators reflecting normal life in the country. The recovery, however, has been slow and uneven as each city has moved from stage to stage in the reopening process. 

Investopedia has been tracking the economic recovery around the world since the pandemic was declared last March. We have focused on New York City, where we have partnered with NY1 on a New York City Economic Recovery Index, and are now expanding our coverage to four additional cities: Houston, TX, Columbus, OH, Los Angeles, CA, and Chicago, IL. 

The City Economic Recovery Tracker (CERT) will be released weekly, measuring the following micro and macroeconomic data:

• Health: Are new COVID-19 cases declining week over week?
• Jobs and Unemployment: Are we getting back to work?
• Small Business Employees: Are “main street” employees clocking in?
• Mobility: Are we taking trains like we used to?
• Restaurants: Are we comfortable eating both indoors and outdoors at restaurants again?

The Timeline

New York and Chicago were the first cities to witness the initial impact of COVID-19 and consequently had the most dramatic initial dip in index scores from late March through most of April. This is because both cities were the most adversely affected by COVID-19, with higher rates of the virus than the other three cities. New York and Chicago also had a contraction in mobility and a dropoff of employee working hours during that time. 

Growth in every city’s index throughout the late spring and into the summer provided somewhat of a convergence, with positive movement in New York and Chicago stemming from the cities’ success in containing the spread of COVID-19, while Columbus and Houston saw a strong resurgence in restaurant reservations.

However, since Labor Day, most of the cities have witnessed a decline in their economic recoveries. Houston stands alone as the only city to see its index score increase to nearly 70 out of 100 during this time. The other cities we are tracking are less than halfway back to early March 2020 levels, with Chicago the furthest behind with a score of 36. Of particular concern are Columbus and Chicago, which are both enduring the most dramatic rise in COVID-19 cases and unemployment claims, along with the steepest rise in unemployment since October.

COVID-19: New York Hit First, Chicago Facing Worst Second Wave

In early spring, when COVID-19 first hit the U.S., New York had the most precipitous spike in virus cases among the five cities this index tracks. For the week of March 16, New York recorded just less than one confirmed new case per 100,000 people, but that number quickly jumped to 65 new cases per 100,000 people by the week of April 15. (Though we should note that testing scarcity at the onset of the pandemic impacted the rate at which cases were confirmed and reported.)

After New York instituted its first lockdown, the case rate for the city slowly declined, and New York later had the lowest case rate among the five cities from June 20 through Sept. 4 with an average of 3.7 new cases per 100,000 people.

Los Angeles, Columbus, and Houston all witnessed COVID-19 spikes that were notably smaller than those in New York and Chicago, ranging between 6 and 9 new cases per 100,000 people prior to May 10. New York saw a peak of 65 new cases per 100,000 people, while Chicago saw a peak of 32 new cases per 100,000 people during that time. 

However, while Chicago recovered from its initial case rate spike in the spring, the city has again been experiencing a steady rise in COVID-19 cases since the summer. Since Sept. 14, Chicago’s case rate has jumped by nearly 600% to 90.4 new cases per 100,000 people as of Nov. 17.

Unemployment: Columbus, Chicago Again Trending Upward After Decline from March Highs

Initial claims for unemployment spiked in all five cities in the wake of shutdowns in mid-to-late March. However, New York and Columbus were impacted the hardest as they instituted early extensive lockdowns, prompting increases of 3,516% and 5,666% in initial unemployment claims, respectively, compared to the same period last year.

In late April, unemployment claims dropped rapidly as the cities adjusted to their new realities and the number of initial unemployment claims remained fairly consistent throughout the summer. Claims continued to track relatively similarly in all five metros into the fall, aside from a short-lasting September bounce in Los Angeles, which experienced a 1,238% increase in claims that put it almost double New York, the next-highest city.

Since October, New York, Los Angeles, and Houston have continued the downward trend, but Columbus and Chicago have experienced rising week-over-week average growth rates for unemployment claims. This, combined with rising COVID-19 cases, portends an ominous end of the year for the two midwestern cities.    

Restaurant Reservations: Initial Gains Lost, With LA Hit the Hardest

Restaurant reservations dropped to rock bottom in all five cities in mid-March through early-May as shutdowns swept the country. Moreover, the restaurant recovery was uneven through the spring and into the summer. By July 1, Columbus returned to about 50% of pre-pandemic reservation levels, while Chicago and Houston reached 30%, and New York and Los Angeles sat at just 10%, according to OpenTable data.

The summer months saw positive restaurant reservation growth as the cities experimented with expanded outdoor dining options, with Houston and Columbus having the most significant index increases between July Fourth and Labor Day at 19 and 38 points, respectively. 

However, restaurant reservations have tailed off in every city except for Houston since Oct. 3 as colder weather began deterring diners from eating outside. Los Angeles closed all outdoor dining on Nov. 25, effectively sending the city’s restaurant reservation numbers down 100% compared to the same period last year. A judge ruled on Dec. 8 that Los Angeles County acted “arbitrarily” when it closed all outdoor dining, but restaurants cannot reopen because of the state’s overriding regional stay-at-home order.

Overall, the restaurant industry is eager to see how a nationwide rise in COVID-19 cases and hospitalizations, colder weather, and a potential government stimulus package will impact diners moving forward.

Transit: Recovery Mostly Uniform for the 5 Cities

Transit data has been the most uniform and stable, with all five cities witnessing a median index increase of 19 points from April 18 through June 20. At that time, Columbus was 68% back to pre-pandemic ridership levels; Chicago, Los Angeles, and Housten were approximately 60% back to pre-pandemic levels; and New York was halfway back to pre-pandemic levels. 

However, the recovery has stalled throughout the summer and fall, with only Houston witnessing index shifts in the double digits. Houston gained an additional 13 points during this time, while the other cities saw improvements of less than 10 points.

Small Business: Houston, LA Outpace Other Cities in Recovery

Worker capacity dipped for all five cities between March 14 and April 11, with New York facing the worst drop at 23 points and Houston coming on top at 45 points. Uneven increases throughout the summer created three distinct tiers, with Houston doing the best at an average index score of 69 between May 2 and July 4; Los Angeles and Columbus averaging 58 points and 56 points, respectively; and Chicago and New York averaging 44 points and 42 points, respectively.

Heading into Labor Day, workforce data converged and the five cities were only separated by 10 index points with Houston in the lead at 75 points and Chicago at the tail end at 65 points.

Throughout the fall, the previous spring tiers reemerged as Houston and Los Angeles grew to index scores of 90 and 78, respectively, while Columbus, New York, and Chicago languished in the high 60s.

The pandemic has reached new heights nearly each week, with multiple states now tightening restrictions to stop the spread. These restrictions are already showing up as index declines in each of these cities. With a vaccine on the horizon, and the FDA meeting on a possible approval for the Pfizer vaccine—we know that the recovery will be uneven. We will continue to track these cities weekly to understand the continuing impact of the virus through the winter, and into a recovery.

[Data and charts by Amanda Morelli/Adrian Nesta. Additional reporting by Elana Dure]