The City Economic Recovery Tracker: April 2021

Editor’s note: Below you’ll find the 10th release of the City Economic Recovery Tracker (CERT), originally published May 24, 2021. Visit the CERT homepage for the latest data.

None of the 10 cities in Investopedia’s City Economic Recovery Tracker (CERT) experienced a decrease in their economic recoveries for the month of April, with nine out of 10 seeing a month-over-month increase in growth. The average increase was 6.9 points across all cities. The economic recovery of each city still largely depends on vaccination rates and how quickly businesses are allowed to fully reopen. California’s Health and Human Services Secretary confirmed on Friday that the Golden State will fully reopen on June 15 without any capacity limits or physical distancing requirements for businesses or events.

Over one year into the pandemic, eight of the 10 cities are more than halfway back to early March 2020 levels. Phoenix is still experiencing the strongest recovery, though now Houston is not far behind and increasing at a faster clip. Phoenix is definitely still excelling, however, as it is among the top three cities in the index in terms of percent change from 2019 rates of unemployment insurance (UI) claims, transit usage, small business hours worked, and restaurant reservations at the end of April. Meanwhile, Washington D.C. now stands out as the only city in the index that doesn’t have an overall score above 50. The city is still in the bottom three in the index for restaurant reservations, transit, small business hours worked, and UI claims.

April 2020 was without a doubt the most positive month nationwide for pandemic recovery, as both the impact of vaccines on COVID-19 case numbers and the associated loosening of restrictions on economic activity have pushed six of the 10 cities above an overall score of 60 out of 100. The effectiveness of vaccine distribution in the coming months will be critical to see which cities will recover the fastest.

COVID-19 Cases on a Mostly Downward Trend

COVID-19 case rates among seven of the 10 cities have continued to decline in April as vaccination rates increased across the nation, with Chicago, Seattle, and Phoenix being the notable exceptions. The major positive example of the month was New York City, which had the worst COVID-19 case rate at the end of March, but its case rate dropped by 45 new cases per 100,000 people and is now almost on par with the other cities in the index, in addition to being the third highest rate. NYC has recorded a total of 945,334 cases and 33,107 deaths as of May 21, 2021.

We are starting to see the substantial positive impacts the COVID-19 vaccine is having on nearly every city in the index as case rates across the nation are on a downward trend. Conversely, a slightly worrisome pattern is in the aforementioned exceptions of Chicago, Seattle, and especially Phoenix. The latter of which, despite having the best overall index score, also had the highest increase in its COVID-19 rate — a near doubling from 6.42 new cases per 100,000 people at the end of last month to 12.7 by the end of 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 279 million vaccines nationwide as of May 20, according to the Centers for Disease Control and Prevention (CDC). In California, 40% of eligible adults have received both vaccine doses, while the percentage is 44% in New York and 48% in Massachusetts, according to VeryWell Health. Arizona is lagging behind with a percentage of 34%.

Last week, the Food and Drug Administration (FDA) authorized the Pfizer-BioNTech COVID-19 vaccine for children between the ages of 12 to 15. Clinical trials are currently underway to test the safety and efficacy of COVID-19 vaccines in children under 12 years old, with experts expecting a version for this demographic to be available by September or October.

Unemployment Finally Eases

Only three cities in the index saw an increase in unemployment claims, with Columbus experiencing the strongest improvement. Columbus’ UI claims rate has finally declined from its fairly substantive second peak of averaging around 3,800% above 2019 levels for most of February and March. The rate declined from up 1,959% at the end of March to up 279% at the end of April. According to the Bureau of Labor Statistics (BLS), the unemployment rate for Columbus was 5% in March, below the national rate of 6%.

Elsewhere, Houston, D.C., and especially NYC all saw substantial reduction in their UI claims rate as compared to 2019, with the former two now hovering at more than double their 2019 levels and the latter sitting at just 15% higher by the end of April. The BLS reported unemployment rates of 7.9%, 8.8%, and 9.5% for Houston, D.C., and NYC, respectively. Otherwise, most other cities teetered between two- and three-times more claims year-over-year (YOY), with Boston, NYC, and Phoenix as notable positive exceptions. Boston and Phoenix had unemployment rates of 7.2% and 6.1%, respectively.

The U.S. economy added just 266,000 jobs in April, most of which were in the leisure and hospitality industry, signaling employers’ confidence in the economic recovery. Future unemployment claims will largely depend on how widespread potential future shutdowns are and how quickly vaccine distribution and development can occur.

Restaurant Reservations Skyrocket

Restaurant reservation numbers substantially improved in almost every city in the index during April, and overall, it was the most positively impacted measure of the month. Warm weather climates, such as Phoenix and LA, continued their improvements from last month and ticked up 15 and 13 index points, respectively. However, cities across the geographical spectrum from D.C. to Houston to Seattle also saw strong improvements. Houston in particular, which gained 11 index points from the end of last month, is now over 100 points on the restaurant reservations index and is actually experiencing more restaurant reservations at this point than in 2019.

Vaccine rates, capacity restrictions, and the transition from spring to summer is dictating the recovery of the restaurant industry. However, Boston was the notable exception in April, with its restaurant reservation score declining by three points back to 50. Regardless, restaurateurs are hopeful that they will see an increase in reservations as life slowly returns to a pre-pandemic normal. The industry received $25 billion from the Biden administration’s American Rescue Plan to help with the economic burden until normal capacity can resume.

Public Transit Races Ahead

Every city in the index saw modest improvements to their transit numbers in April for the third consecutive month. Seattle and Boston led the pack with an increase of five points each, while Columbus and Phoenix both saw only a meager single point boost. Despite improvements across the board, there is a growing disconnect between the level of recovery with regards to transit in various metros. Boston and D.C. still sit below 50 with scores of 46 and 36, respectively, while Phoenix and Houston have almost doubled scores of 85 and 77, respectively. The general trend seems to be that cities with a much higher dependency on public transportation, such as Boston, D.C., and Philly, are seeing a considerably slower recovery than cities without major transit networks, such as Phoenix, Columbus, and Houston. NYC is a notable exception to this rule.

Many cities’ transit systems have already received a good deal of funding thanks to the Biden Administration’s American Relief Act, which should help them operate at full capacity as the summer wears on, vaccine progress continues, and both kids and adults alike return from summer vacations. 

Small Businesses See Big Gains

In a complete reversal from the month prior, small business numbers for every city in the index experienced positive movement in April. The most meaningful development was in Phoenix and to a lesser extent NYC, which increased by 15 and 10 points, respectively. Elsewhere, Seattle and Philadelphia each increased by just four points in terms of small business hours worked.

Every city in the CERT except for Philadelphia sat at a score of at least 60 out of 100 at the end of April, with eight of the 10 cities in the index having recovered by around two-thirds (approximately 66 out of 100). Notably, the cities with the two highest scores, Houston and Phoenix, are also tracking in the best scores for transit usage, UI claims, and restaurant reservations. It will be interesting to see how these numbers will coincide with the other measures mentioned as vaccine rates continue to climb and local restrictions, particularly on dining and transit hours, continue to change. 

Starting today, restaurants in D.C. will be able to return to full capacity without any restrictions. Wedding venues, places of worship, retail stores, and gyms may also operate at 100% capacity without any social distancing requirements. Sporting arenas, bars and nightclubs, and music and entertainment venues cannot operate at full capacity until June 11.

Data by Amanda Morelli/Adrian Nesta. Additional reporting by Ward Williams.

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