Editor's note: Below you'll find the week two release of the NYC Recovery Index, originally published Aug 10, 2020. Visit the NYC Recovery index homepage for the latest data.
The latest reading of the New York City Recovery Index out of a possible score of 100.
New York City’s economic road to recovery remained stubbornly sluggish in the past week, as a slight spike in first-time unemployment claims was offset by new small business license applications and fewer COVID-19 hospitalizations. According to the New York City Recovery Index—a measure of economic activity created by Investopedia, the City’s economic recovery score stands at 23.2 out of 100, a slight increase from the prior week.
The NYC Recovery Index measures five key economic indicators:
- COVID-19 new hospitalizations
- Unemployment claims
- New business licenses
- Subway usage
- Restaurant reservations
You can read the details of last week's recovery index changes for additional context.
Unemployment Claims Rise
The unemployment numbers continue to paint a bleak picture, showing numbers over 7 times the new claims during this time last year. This week continues a reversal from gains in early July when claims were down to 3 times higher than the previous year. This is a sign that the job market is getting worse at a critical moment, as the federal government remains in deadlock over how to support unemployed workers.
In the week ended July 25, unemployment continued to weigh on the city’s recovery as 46,185 New Yorkers filed for first-time unemployment insurance, an increase of 780% year-over-year, according to the Labor Department. New York’s unemployment rate stands at 20.4%, nearly double the national average. Restaurants and hospitality businesses continue to be the most impacted sectors of the job market as dine-in restrictions remain in place, and many stores remain closed.
New Hospitalizations Decreased
New COVID-19 hospitalizations actually decreased in the past week, a good sign that the virus did not spread around New York like it has in other parts of the country. Still, there were an average of 30 new daily hospitalizations related to the virus last week, so the coast is definitely not clear.
New Businesses Show Slight Increase
Applications for new businesses also showed a slight uptick during the past week. It’s a hopeful sign that small business owners are slowly gaining the confidence to launch new ventures, or reopen businesses they may have closed in the Spring. However, nearly 3,000 small businesses in New York City have closed for good in the past four months, most unable to pay rent.
Restaurant Reservations Remain Very Low
Restaurant reservations still remain at very low levels as dine-in restrictions remain in place across the city. While many restaurants around the five boroughs are seating patrons outside, capacity is limited and many New Yorkers still may not be ready to dine amongst one another until there is a vaccine or a dramatic decline in COVID-19 cases. The intense heat wave that blanketed New York last week may have also been a factor.
Subway Ridership Remains Low
Subway use remained at depressed levels in the past week, operating at less than 23% capacity. It’s been at these levels for the past four months as New Yorkers are still not using mass transit for work or other activities. It’s the middle of the summer, which means no students, and thousands of people on vacation, but compared to this time last year, ridership is still extremely below average. Combined with the fact that most offices remain closed, and restaurant activity is still depressed, ridership may remain far below normal for a while to come.
What the A-Train is Telling Us
The A Train, particularly the Howard Beach stop at JFK, is basically a ghost train. Due to the lack of tourism and domestic flights in and out of JFK, usage of that stop is down 92% from normal, and has stayed at those levels since June, compared to a 77% drop for the rest of the subway system. It’s the first (or last stop) on the A-Train line for JFK users and employees, and it is a stark indicator of the lack of activity at New York’s largest airport.
With New York City schools attempting to reopen in a little over a month, the City’s economic recovery remains stuck in low gear. That may change when vacationers return and business operating restrictions are loosened, but that depends entirely on the spread of the virus, and the city’s ability to contain and reduce it. The past several weeks have shown hopeful signs on containment, which could be the beginning of a broader-based recovery for New York City.