New York City Economic Recovery Index: February 8 Update

Monitoring New York City's economic resurgence post-COVID-19 pandemic

Editor's note: Presented here is the 27th week update of the NYC Recovery Index, initially released on February 8, 2021. For the most current statistics, visit the NYC Recovery Index homepage.

During the week of January 30, New York City's economic rebound showed signs of slowing as home sales declined further and unemployment claims rose. Despite this overall downturn, some indicators such as COVID-19 hospitalizations and rental availability demonstrated improvement. The pace of the city's economic recovery heavily depends on the speed and efficiency of vaccine rollout, which influences COVID-19 infection rates, unemployment figures, and dining reservations.

According to the New York City Recovery Index—a collaborative initiative by Investopedia and NY1—the city’s recovery score stands at 43 out of 100, marking the lowest point since August 9. This represents a 2.3-point decline from the previous week. Nearly eleven months into the pandemic, NYC’s economic recovery remains under 50% of the pre-pandemic baseline from early March 2020 and has been trending downward since the start of 2021.

COVID-19 Hospitalizations Continue to Decline

The city experienced a second consecutive week of declining hospitalizations due to COVID-19. In the week ending January 30, NYC averaged 317 hospital admissions daily, down from 350 the prior week. However, this figure remains nearly ten times higher than the hospitalization rate recorded on August 22. As of February 8, New York City has reported 637,000 confirmed cases and 27,705 fatalities.

Ongoing vaccine distribution is critical to controlling case numbers. Johnson & Johnson has submitted an emergency use authorization request to the FDA, while Novavax has initiated rolling reviews with multiple regulatory bodies. This may lead to four vaccine options becoming available in the U.S. soon.

New York State has administered 2.3 million vaccine doses according to the CDC, ranking 28th nationwide among states and Washington, D.C., based on vaccination rates. Approximately 11.3% of eligible adults in New York have received both doses.

Unemployment Rates Worsen

Unemployment claims in NYC increased by nearly 4,500 during the week of January 30 compared to the previous week, with about 30,285 new filings. This reflects a 396% year-over-year increase, surpassing the prior week's 353% rise.

While the U.S. economy added 49,000 jobs in January, signaling a slow recovery, sectors like leisure and hospitality—which include NYC’s bars, restaurants, and theaters—suffered a loss of 61,000 jobs.

The Biden administration's $1.9 trillion stimulus proposal aims to provide $1,400 additional stimulus checks and $400 weekly unemployment benefits through September. However, Senate Republicans propose a smaller stimulus with $1,000 direct payments. Treasury Secretary Janet Yellen projects that this relief package could restore full employment by 2022.

Home Sales Decline Continues

Pending home sales fell for the third week in a row during the week of January 30, though the market remains stronger than last year due to historically low mortgage rates. There were 520 home sales that week, showing a 27% year-over-year increase, slightly less than the previous week's 34%, based on StreetEasy data. Manhattan, Brooklyn, and Queens reported year-over-year sales increases of 28%, 24%, and 38%, respectively.

Manhattan’s condominium market has rebounded after early pandemic setbacks, as buyers seek larger living spaces. January and December condo sales rose 21% compared to the same months in the previous year, according to UrbanDig analytics.

Rental Market Shows Gradual Improvement

The rental market in NYC saw modest gains as apartment vacancies decreased for the second straight week. Rental vacancies dropped to 36,937 units during the week of January 30, down from 37,986 the week before, per StreetEasy. Despite this improvement, available rental units remain over 40% higher than typical for this time of year.

Subway Ridership Declines

Subway usage decreased during the week of January 30, with 1.38 million riders utilizing the system. The seven-day rolling average was approximately 70% lower than the previous year, worsening from 66% lower the week prior, according to MTA data. Ridership usually rises in spring, but ongoing safety and scheduling concerns related to COVID-19 may widen the gap further.

Restaurant Reservations Drop

Restaurant bookings fell during the week of January 30, with seated diners down 91% year-over-year, compared to an 87% drop the week before, as reported by OpenTable. Reservations are near lows seen in late March and early April, largely due to Gov. Andrew Cuomo’s December 14 restrictions on indoor dining. While some indoor dining restrictions were eased in other parts of New York State last month, New York City remains under tight controls due to its population density. The restaurant industry is awaiting federal assistance until normal operations can resume.

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