Editor’s note: Below you’ll find the eighth release of the City Economic Recovery Tracker (CERT), originally published Feb. 19, 2021. Visit the CERT homepage for the latest data.
The five cities in Investopedia’s City Economic Recovery Tracker (CERT) experienced mixed economic recoveries during the month of January. Houston and New York both faltered due to shrinking hours clocked at small businesses, while Los Angeles improved as restaurant reservations picked up. Columbus and Chicago both had minimal change.
Despite its monthly overall decline of six points, Houston is still experiencing the strongest recovery of the five cities we track with a score of 57. Houston and Columbus are the only two cities halfway back to pre-pandemic levels. Los Angeles saw the greatest overall monthly change with a five point increase to bring its overall recovery to 43% compared to last February. New York also had a decrease of six points and is sitting at the bottom of the tracker with a score of 35.
COVID-19 Cases Drop in All Cities
One of the few positive metrics in the index, COVID-19 case rates among the five cities have been on a steep decline throughout January. Each of the cities witnessed a month-over-month decrease in case rates, with Los Angeles experiencing the greatest drop from an average of 151 new cases per 100,000 people for the week of Jan. 13 to an average of 46 new cases per 100,000 people during the week of Feb. 6.
New York currently has the greatest case rate of 50 new cases per 100,000 people. This is the same rate it had at the end of December and is near the all-time highs the city experienced in April.
Future cases will largely depend on people’s adherence to social distancing practices and how quickly vaccine distribution and development can be rolled out. The U.S. administered 57.7 million vaccines nationwide as of Feb. 19, according to the CDC. In both California and New York, nearly 22% of eligible adults have received both vaccine doses, according to VeryWell Health. The Biden administration’s American Rescue Plan includes subsidizing COVID-19 testing and vaccination programs across the nation, but that bill has yet to be voted on in Congress.
Unemployment Remains High
The unemployment claims rate among the five cities remained higher in Jan. 2021 than during the same period the previous year. Columbus’ year-over-year rate jumped to the highest point among the five cities and is more than five times what it was the previous month. Meanwhile, Houston, Los Angeles, and Chicago experienced declines in unemployment claims in January from the previous month.
The U.S. economy added 49,000 jobs to the labor market in January, according to the labor Department, in another sign that the economic recovery is still tepid as the nation continues to fight the impact of the coronavirus pandemic. Future unemployment claims will largely depend on how widespread potential future shutdowns are in the five cities and how quickly vaccine distribution and development can occur. In the new year, Johnson & Johnson and Novavax both released Phase 3 data that presented promising results and provided hope that more vaccines will be available for distribution soon.
Restaurant Reservations are Mixed
Restaurant reservations varied between the five cities during January. Los Angeles’ restaurant index score improved significantly after the city revoked its outdoor dining ban late in the month. This resulted in the estimated number of seated diners being 79% lower than a year ago during the week of Feb. 6, compared to 99% lower the previous week.
New York stagnated during the month, while Houston declined significantly from its New Year’s peak. The city’s estimated number of seated diners during the week of Feb. 6 was 31% lower than a year ago, compared to 11% lower the previous week.
The restaurant industry is still trying to power through the winter season as colder weather and rising COVID-19 rates deter patrons, with restaurateurs awaiting potential future stimulus relief.
Transit Numbers Disappoint
Transit numbers across the index either stalled or declined during January, with Houston and Los Angeles in the former category, while Chicago, New York, and Columbus were in the latter.
Columbus, Houston, and Los Angeles sit at the top of the transit leaderboard with scores between 61 and 51, and are more than halfway to recovery. Meanwhile, New York and Chicago have scores of 45 and 46, respectively. President Biden’s relief package includes $20 billion of relief for “the hardest hit public transit agencies” in the country.
Small Businesses Struggle
The small business index, typically a bright spot in CERT, saw declines in small business hours worked in every city except Columbus. Houston had the most dramatic drop of 15 points, while Chicago had a modest drop of two points month-over-month. Nonetheless, every city but New York is more than halfway back to pre-pandemic levels, with Columbus leading the way at 80 points, nearly double New York’s score of 46.
More than half of small business owners in the U.S. reported that they had lower sales compared to a year ago, according to a study conducted by Facebook in collaboration with the Small Business Roundtable. In addition, 33% of the small business owners expected it to take longer than six months for operations to return to normal.
The Biden administration allocated $440 billion of its proposed stimulus plan to communities, including grants and loans for small businesses.
Data by Amanda Morelli/Adrian Nesta. Additional reporting by Elana Dure.
Centers for Disease Control and Prevention. "CDC COVID Data Tracker." Accessed Feb. 19, 2021.
Facebook. "U.S. State of Small Business." Accessed Feb. 19, 2020.
Source: Read Full Article