Home » Finance » The City Economic Recovery Tracker: Week of January 4

The City Economic Recovery Tracker: Week of January 4

Editor’s Note: Below is the Week 4 version of the City Economic Recovery Tracker (CERT), originally released on January 8, 2021. Visit the CERT homepage for the latest data.

The economic recovery of the five cities in Investopedia’s City Economic Recovery Tracker (CERT) was mixed during the week of December 26. Houston, Chicago and Columbus all saw gains in economic activity, while Los Angeles and New York stagnated. Los Angeles’ outdoor dining ban continues to hamper the city’s economic recovery, while the continued spike in COVID-19 cases is also of concern. Meanwhile, restaurant reservations in New York have plummeted following Governor Andrew Cuomo’s restriction on indoor dining. In contrast, restaurant reservations in Houston and Columbus have rebounded significantly.

Columbus saw the biggest overall seven-point weekly change, joining Houston as the only two cities where the economic recovery is more than half of early March 2020 levels. Meanwhile, New York was the only city to have lost ground in the week ending Dec. 26, down one index point, bringing its total score to 41. Los Angeles traded places with Chicago as the last city in the rankings with a score of 39.

COVID-19 case rates are mixed

COVID-19 case rates in the five cities have been mixed, with cases decreasing in Columbus, Chicago and Houston, and increasing in Los Angeles and New York. Los Angeles continued to see its case rate rise exponentially and averaged 137 new cases per 100,000 people during the week of Dec. 26, double the rate for the second-highest city. Los Angeles County has reported 872,000 cases of COVID-19 and 11,545 deaths as of Jan. 8.

Columbus and Chicago’s case rates have fallen significantly from earlier highs of 60 and 41 cases per 100,000 people, respectively. Nevertheless, the Columbus rate is still just below the April peak of 65 in New York. Either way, the speed at which Chicago and Columbus were able to reverse their rising case rates gives a glimmer of optimism that Los Angeles may be able to do the same in the weeks to come.

Vaccine distribution is well advanced, and nearly 6 million people in the United States received the Covid-19 vaccine in January. However, the Trump administration has been criticized for the slow pace of vaccine distribution, as a report indicated that adequately vaccinating Americans would take 10 years at the current rate.

Chicago still faces worst unemployment rate

The number of initial jobless claims is still significantly higher year over year and continues to rise in all the cities we track. Chicago still has the highest unemployment rate among the five cities, scoring on the measure more than four times that of Houston, the least affected city.

Although Houston still has the lowest unemployment rate among the five cities, its growth rate is concerning. Meanwhile, Columbus, New York and Los Angeles all stagnated between 2.5 and 3.5 times the normal unemployment rate.

The Bureau of Labor Statistics reported that 140,000 jobs were lost in December as layoffs rose in the service sector. Cold weather and the unmitigated spread of the coronavirus have led to tighter economic restrictions nationwide and prompted more restaurants, bars and hotels to close and lay off workers.

Eating bans hurt restaurants

Los Angeles’ outdoor dining ban continues to keep the city’s restaurant index at zero, revisiting a reality last seen in the spring when the coronavirus first hit the United States and reservations were indeed non-existent. New York’s indoor dining restriction is also reflected in the city average, but it hasn’t brought New York to the bottom like it has in Los Angeles.

Chicago, Houston and Columbus all saw increases in bookings made week over week. Still, restaurants across the country are trying to weather the winter season as indoor dining restrictions and colder weather deter customers. The restaurant industry was not included in the latest $900 billion stimulus package signed by President Trump, which could threaten the survival of many restaurants.

Improved transit numbers

Transit numbers saw modest week-over-week gains in all cities except New York for the week ending Dec. 26. Columbus and Houston have indexes of 67 and 63, respectively, and are doing significantly better than Los Angeles, New York, and Chicago, which are stuck in low-to-mid-50s scores and are only mid- path to recovery.

The federal government plans to help struggling cities with their transit systems. The latest stimulus package set aside $14 billion for struggling transit agencies, $2 billion for the private coach, school bus and ferry industries, and $1 billion for Amtrak.

Small businesses remain a bright spot

The Small Business Index remains the best performing index for each of the five cities, with growth or stability across the board. Houston continues to top all cities with an index value of 91, 11 points higher than second-best city Columbus. Los Angeles, Chicago and New York all trend slightly lower at 78, 72 and 70, respectively.

As part of the stimulus deal, the federal government plans to distribute $300 billion to small businesses through the Paycheck Protection Program and the Economic Disaster Loan Program.

Donated by Amanda Morelli/Adrian Nesta. Additional reporting by Elana Dure.

Related Posts