The City Economic Recovery Tracker: March 2021
Editor’s note: Below you’ll find the ninth release of the City Economic Recovery Tracker (CERT), originally published April 9, 2021. Visit the CERT homepage for the latest data.
Six of the 10 cities in Investopedia’s City Economic Recovery Tracker (CERT) experienced month-over-month growth in their economic recoveries during the month of March. Boston, Houston, and Chicago experienced the most growth, while New York witnessed the steepest decline. The economic recovery of each city still largely depends on vaccination rates and how quickly businesses are allowed to fully reopen. President Joe Biden announced Tuesday that he moved up the deadline for all adults to be eligible for a vaccine to April 19 from May 1.
More than one year into the pandemic, just eight of the 10 cities are more than halfway back to early March 2020 levels. Phoenix is still experiencing the strongest recovery with a score of 76 out of 100 after gaining two points in March. Meanwhile, New York and Washington had the worst scores in the index at 42 and 40, respectively. The effectiveness of vaccine distribution in the coming months will be critical to see which cities will recover the fastest.
COVID-19 Cases Continue to Decline for Some
COVID-19 case rates among four of the 10 cities have continued to decline in March as vaccination rates increased across the nation. However, New York and Philadelphia each experienced a significant rise in case rates as some experts say the U.S. entered its fourth wave of the pandemic. New York’s case rate was stubbornly high at 63.4 new cases per 100,000 people as of March 27, while Philadelphia had a rate of 29.6 out of 100,000. New York City recorded a total of 871,000 cases and 31,598 deaths as of April 8. Philadelphia recorded 135,000 cases and 3,322 deaths over the same period.
Meanwhile, Phoenix and Los Angeles both saw their case rates drop below 10 cases per 100,000 people. Residents ages 16 and up are eligible for a vaccine in New York and Arizona. California is expanding its eligibility to include those 16-years-old and above on April 15, while Massachusetts is setting the date for April 19.
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 175 million vaccines nationwide as of April 8, according to the Centers for Disease Control and Prevention (CDC). In Arizona, 25.3% of eligible adults have received both vaccine doses, while the percentage is 27.8% in New York and Massachusetts, according to VeryWell Health. California is slightly behind with a percentage of 24.3%.
Unemployment Still High
The unemployment claims rate among the 10 cities remained higher in March 2021 than during the same period in 2019. Only three cities in the index saw a decline in unemployment claims, with Columbus experiencing the strongest improvement. Nonetheless, Columbus is still at the bottom on the leaderboard, with an unemployment claims rate that is nearly 20-times what it was in 2019. According to the Bureau of Labor Statistics, the unemployment rate for Columbus was 5.4% in February, below the national rate of 6.2%.
Chicago had the second-highest drop in unemployment claims, though its rate is still 85% higher than 2019’s total. Chicago’s unemployment rate was 8.8% in February, above the national rate. Most other cities teetered between two- and three-times more claims in March than in the same month in 2019. Phoenix, meanwhile, was in the best position among the 10 cities with the number of claims only 29% greater than what they were in 2019. Phoenix’s unemployment rate was 6.7% in February.
The U.S. economy added 916,000 jobs in March, 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 Increase
Restaurant reservation numbers improved in all 10 cities during March, with Houston seeing the greatest increase in its index score as it jumped 21 points to 92. Other warm weather cities, like Los Angeles and Phoenix, also saw improvements of 13% and 10%, respectively. Nonetheless, only four cities are more than halfway back to pre-pandemic levels, with New York and Seattle lagging significantly behind with index scores of 26 and 22, respectively.
Vaccine rates, capacity restrictions, and the transition from winter to spring is dictating the recovery of the restaurant industry. 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 Mostly Stagnant
Most cities in the index saw modest improvements to their transit numbers in March for the second consecutive month. Phoenix remained at the top of the transit leaderboard with a score of 84, up from 75 in February. Meanwhile, Boston and Washington were lagging behind the other cities with index scores of 41 and 34, respectively, up from 36 and 28 the previous month. Houston, Columbus, and Seattle saw the most positive movement month-over-month with 17%, 13%, and 6% improvement, respectively.
President Biden unveiled his nearly $2.3 trillion American Jobs Plan on March 31. The proposal seeks a multi-trillion-dollar infrastructure and jobs investment over eight years, with $85 billion dedicated to improving public transit systems across the country.
Small Businesses Saw Little Movement
Small business numbers for most cities were flat in March, though a few experienced a decline in the number of small business hours worked during the month. Columbus witnessed the most meaningful movement as the number of hours worked in the city decreased about three percentage points and is now down 32% from 2019 levels. Regardless, it is still the second best city in the index with a score of 71 alongside Phoenix and just one point below Houston.
Every city in CERT is more than halfway back to pre-pandemic levels, though the cities are still experiencing a reduction in small business working hours of between 20% and 40%. New York and Philadelphia are faring the worst with index scores of 54 and 53, respectively.
Nearly a third of global small- and medium-sized businesses were forced to lay off workers as a result of the coronavirus pandemic, and half don’t plan to rehire employees in the next six months, according to Facebook’s Global State of Small Business Report. Moreover, 48% of business owners across the U.S. and Canada are earning less than 50% of their monthly, pre-pandemic revenues, per an Alignable survey of more than 10,000 small business owners.
Texas Gov. Greg Abbott said March 2 that it was time to “open Texas 100%,” citing declining hospitalizations across the state as more people are vaccinated against COVID-19. California aims to fully reopen for “business as usual” by June 15.
Data by Amanda Morelli/Adrian Nesta. Additional reporting by Elana Dure.
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