New York City Recovery Index: October 12
Editor's note: Below you'll find the week 10 release of the NYC Recovery Index, originally published Oct. 12, 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 edged slightly higher in the past week, as a pick up in subway usage and restaurant reservations pushed the overall Recovery Index up to 48.6 out of 100.
Still, stubbornly high unemployment and a rise in COVID-19 hospitalizations threaten to derail the small economic progress New York City has made in the past several months. A slowdown in the city’s torrid housing market also hints at more economic pressure ahead for sellers and landlords.
COVID-19 Hospitalizations Rise
An unfortunate rise in new COVID-19 cases across several neighborhoods is leading to a slight uptick in new hospitalizations. 33 new hospitalizations related to the virus were reported last week, up from a weekly average of 28. As we know, an increase in both cases and hospitalizations leads to business closures and neighborhood lockdowns, as happened in parts of Queens and Brooklyn. In addition, hundreds of thousands of public school students went back to school last week on a part-time basis, and a rise in cases related to their return may be forthcoming.
Unemployment Holds Steady
Initial unemployment claims remain stubbornly high across the city. 39,101 people filed for first-time claims in the past week, a slight increase from the prior week. The unemployment rate in New York City stood at 16% in August—the latest date available—down from 19.9% in July. It is more than twice as high as the country’s overall unemployment rate, and among the highest of any major metro area in the country. Increasing layoffs in the services sector of the economy, which includes restaurants and hotels, continue to grow. The news that Broadway theaters won’t open until next summer may prolong the unemployment crisis facing New York.
Homes Sales Are Steady, as Rental Prices Fall
Pending home sales held steady at 431 closings in the past week, according to StreetEasy. But pending sales have declined in Manhattan after rising aggressively in the late summer. Brooklyn’s sales remain strong, but there are other areas of the real estate market that are softening at an alarming rate. While not yet factored into the overall New York Economic Recovery Index, rental prices, which impact both landlords and tenants, have fallen across the city, according to a September report by Douglas Elliman. Median rental prices have fallen 7.1% compared to last year, while vacancy rates have more than doubled from 1.96% to 5.75%. In the coming weeks, we will include these metrics in the overall index, backdated to the beginning of 2020.
Subway Ridership is Up
As expected, subway ridership increased last week, rising 30% from the prior week as many public school students returned to school for the first time. That said, ridership levels are still less than one third of where they were a year ago. The MTA has asked for a $12 billion bailout to meet the shortfall it's facing due to the pandemic, but the prospects for that look unlikely. The agency has warned of 40% cuts to subway and bus service, layoffs and delays to upgrade efforts if it does not receive additional funding. The MTA received $3.9 billion in federal aid during the pandemic, but that money ran out in July. Note: This week, we updated our subway usage to match the MTA’s database. Please see our updated methodology for details.
Restaurant Reservations Rise
Restaurant reservations continued to inch higher as restaurants took advantage of limited-capacity indoor dining, according to data from OpenTable. Still, reservations are down 77% from the same period a year ago. Colder weather may be keeping diners at home, and that could further threaten the beleaguered industry in the coming weeks. As more and more restaurants go out of business or limit their operations, the unemployment rate in the city will remain at current levels for quite some time.
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