New York City’s economic recovery rebounded during the week of March 13, returning to the upward trend seen in February. The recovery could largely be attributed to a rise in home sales and restaurant reservations, as well as a decline in unemployment claims. 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.
New York City’s recovery stands at 58 out of a total score of 100, according to the New York City Recovery Index, a joint project between Investopedia and NY1. This is a return to the same score as two weeks ago following the decline from last week, and marks the highest level so far this calendar year. However, one year into the pandemic, New York City’s economic recovery is still only a little more than halfway back to early March 2020 levels.
COVID Hospitalizations are Stagnant
The number of New York City COVID-19 hospitalizations remained relatively flat during the week of March 13. Specifically, New York City reported an average of 259 hospitalizations per day for the week of March 13, up from the 252 average daily hospitalizations the previous week. The seven-day average continues to sit at a level similar to what was seen in December. New York City recorded a total of 794,000 cases and 30,564 deaths as of March 22
Case numbers will be an important factor to watch as vaccine distribution continues throughout the country. New York has so far administered 7.5 million doses statewide, according to the CDC. Approximately 19% of eligible adults have received both vaccine doses in New York. The eligibility requirements for vaccines will be expanded to include all adults aged 50 and above starting March 22. The state projected it would have enough vaccines for all of its adult population by July 5, a bit more than a month after the Biden administration’s deadline. New York is also on pace to achieve 70% vaccination by July 2021, placing it 12th out of the 59 states, municipalities, and territories, according to VeryWell Health.
Unemployment Dips
Unemployment numbers for New York City have been mostly trending down for the past seven weeks (not counting an uptick seen two weeks ago). During the week of March 13, 18,088 New Yorkers filed for unemployment, up 174% from the 6,610 who filed during the same week in 2019. This is a smaller increase than has been seen in previous weeks.
New York City reported a 13.1% unemployment rate for January, higher than the statewide rate of 8.8% and above the nationwide rate of 6.3%. This compares to a 12.7% rate for Los Angeles and 8.7% for Chicago. The recently passed American Rescue Plan could help offset some of the economic burden by providing eligible Americans with $1,400 in stimulus checks and $300 weekly unemployment checks through next September.
However, unemployment numbers will only significantly drop once vaccination rates rise and businesses are able to fully reopen. In New York, residents of wealthier neighborhoods like the Upper East Side are more likely to be vaccinated than residents of lower-income neighborhoods like Harlem.
Home Sales Climb
During the week of March 13, the percentage of pending home sales, or homes in contract, increased week-over-week. There were 648 home sales during the week of March 13, representing a larger year-over-year percentage increase (71%) compared to the previous week (61%), according to data from StreetEasy. Manhattan, Brooklyn, and Queens all had year-over-year increases of 81%, 55%, and 101%, respectively. Only Brooklyn saw negative home buying movement week-over-week.
Rental Market Improves
New York City’s rental market continues to be more negatively impacted by the pandemic than the housing market, but the percentage of vacancies has continued to drop week-over-week. The number of rental vacancies in New York City declined week-over-week to 34,736 during the week of March 13, from 35,274 the week prior, according to data from StreetEasy. This drop pushed the index score above 50 for the first time since July 19.
As New York City continues its economic recovery, it will be important to keep a close eye on the rental market to see if there is an influx of people who return to the city after leaving in 2020 for the suburbs or other cities with lower costs of living. In February, New York apartment demand surged as the city continued to reopen, with the number of leases signed in Manhattan, Brooklyn, and Queens for the month the highest since 2008 at 6,561, according to Douglas Elliman. This is likely because depressed prices are attracting people back to the city, with the net effective median rental price falling at least 11% to $2,397 last month.
Subway Ridership Sees Small Bump
Subway ridership saw another slight bump during the week of March 13 as the rolling seven-day average was approximately 60% less than last year’s average, compared to 65% less the week earlier. The MTA reported that about 1.62 million New York City riders used public transport during the week of March 13, marking the sixth consecutive week of positive movement. While there has been positive movement, there needs to be real sustained growth in the MTA ridership to approach normal usage levels.
Restaurant Reservations Increase
Restaurant reservations had a moderate improvement during the week of March 13, 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 75% lower than a year ago, compared to 77% lower the previous week, according to data from OpenTable. Restaurant reservations are starting to creep back to late summer/fall 2020 levels after indoor dining bans were partially lifted in February. However, New York City restaurants are limited to 25% capacity, while the rest of the state could 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 will receive $25 billion through the American Rescue Plan to help tide them over until normal capacity can resume.
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