Editor’s note: Below you’ll find the week 5 release of the NYC Recovery Index, originally published Aug 31, 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 recovery showed some slight signs of life in the past week, but persistently high unemployment claims continue to hold back progress. The New York City Recovery Index, a joint project between Investopedia and NY1, showed a 2.2 point weekly increase to 29.1 out of 100.
Nearly six months into the pandemic, New York City’s economic recovery remains mired in high unemployment and a sluggish recovery for normal economic activity.
COVID-19 Hospitalizations Decline
COVID-19 hospitalizations continue to decline in what has been a steady trend for the past five weeks. Continued restrictions on restaurants and public gathering places have remained in place through the summer, which has likely helped this trend, but it has also severely impacted NYC area restaurants and the tens of thousands of people who work in them (see below).
Unemployment Claims Increase
First-time weekly unemployment claims increased last week for the first time in over 18 weeks as businesses were forced to close again after a resurgence of the virus across major U.S. cities. This comes just as New York City’s overall unemployment levels fell below 20% for the first time since April. According to the U.S. Dept. of Labor, the city’s seasonally adjusted unemployment rate was 19.8% in July 2020, a decrease of 0.5% from June and a rise of 15.9% from July 2019. New York State’s rate was 15.9% in July 2020. The share of the city’s working age population (16+) who were employed was 47.9% in July.
Reservations Show Improvement, But the Industry is Still at Risk
Reservations increased 2.2% last week from the prior week as those restaurants that offer outdoor dining saw an increase in traffic. Previously, during the week of August 14th, New York City restaurants were only doing about 23% of the business they did during the same week last year, according to Resy.
New York City’s restaurant industry has been severely affected by the pandemic with recent reports showing more than 1,300 restaurants having closed between March and July. Around 300,000 New Yorkers work in the restaurant industry, and more than 160,000 of them are out of work. According to the NYS Labor Dept., restaurants and bars gained 22,800 jobs in July, but are still down more than 156,000 jobs since the same period last year.
Since adjusted dine-in restrictions have been in place since June 22, and Mayor De Blasio recently indicated that the policy won’t change for the foreseeable future, expect more closures and more layoffs. Servers and cooks make up the majority of that workforce, and their incomes were already limited.
Small Business Applications
Applications to start a new small business in New York continued to increase last week in a steady trend since June. Most of those applications, however, are for food carts and trucks, and national franchises opening up locations in storefronts across the five boroughs.
Subway Mobility is Creeping Higher
With public schools set to open in the next two to three weeks, metrocard swipes will rise meaningfully. They are still more than 75% lower than they were in February as many commuters have not returned to the City, and many offices remain closed. Several large companies are opening their offices in the coming weeks, but whether their employees will return or remain remote remains in question.
The return of New York City schools will undoubtedly increase economic activity, provided that schools aren’t forced to cancel their augmented reopening plans and force students to remain remote, as we have seen in other parts of the country.
New York’s restaurant industry, which employs hundreds of thousands of workers, remains severely compromised, and the outlook is dire as both Governor Cuomo and Mayor DeBlasio prohibit restaurants from offering indoor dining. That sector will be slow to recover.