New York by the Numbers
Weekly Economic and Fiscal Outlook

A Message from the Comptroller

Dear New Yorkers,

While the national economic recovery appears to be creeping along despite rapidly rising COVID infections, there are multiple indicators suggesting slowing economic activity in New York City.

One of those slowing indicators is in the Spotlight this week – small business revenue. If small businesses fail in the coming COVID winter, it will bring lasting economic damage to the City. We can’t let that happen and need federal help now!

Our economic struggles haven’t deterred us. New Yorkers are coming together and working harder than ever, and their resilience, creativity and determination will be what brings our city back. I hope this weekly newsletter serves as a helpful resource and regular update on the city’s progress as we navigate the challenges ahead.

Stay vigilant, and mask up!

Sincerely,

Scott M. Stringer

The Economy

National Indicators

• On Friday, the Bureau of Labor Statistics reported U.S. payroll jobs increased by 245,000 in November, down from an increase of 610,000 in October, indicating a sharp slowing of the national economic recovery.
• The seasonally adjusted U.S. unemployment rate fell to 6.7% in November, from 6.9% in October (Chart 1). November estimates for New York City and New York State will be available December 17^th.

Chart 1

SOURCE: FRED and BLS

• Initial U.S. unemployment claims fell to a seasonally adjusted 712,000 the week ending November 28^th (Chart 2), after jumping to 787,000 the previous week.
• Continuing U.S. unemployment insurance claims fell to 5,520,000 for the week of November 21^st, down from 6,089,000 the week prior. It is the fewest number of continuing claims since the week of March 21^st.

Chart 2

SOURCE: U.S. DOL

• Recipients of Pandemic Emergency Unemployment Compensation (PEUC) grew to 4,569,016 for the week of November 14^th from 4,509,284 the week prior, an increase of less than 60,000 (Chart 3). PEUC, enacted as part of the CARES Act, provides 13 weeks of extended benefits to unemployed workers whose 26 weeks of regular unemployment benefits have run out.
• Continuing claims for Pandemic Unemployment Assistance (PUA) fell to 8,869,502, following a jump to 9,208,570 the week prior. PUA, also enacted as part of the CARES Act, covers workers who are typically not eligible for state unemployment benefits, including the self-employed, and those with poorly documented income, who are unable to work due to COVID-19.
• Regular, PUA and PEUC continuing claims together covered 19,369,263 unemployed Americans as of the week ending November 14^th (Chart 3).

Chart 3

SOURCE: U.S. DOL

New York City

• Initial unemployment claims by New York City residents fell to 19,293 for the week of November 28^th, following a small rise to 21,722 the week prior (Chart 4).

Chart 4

SOURCE: New York State DOL

• October private employment in New York City remained 14.2% below pre-pandemic levels (Table 1).
• Job losses were lower in higher-wage industries such as finance, where October employment was only 4.9% below February.
• Job losses remain catastrophic in lower-wage industries such as hospitality, where New York City employment declined by over 300,000, or 44.7%, between February and October.

Table 1: Changes in New York City Employment, by Industry

SOURCE: New York State DOL, seasonally adjusted by NYC OMB

• New York City metro area business conditions deteriorated slightly in November, after improving in September and October, according to an index developed by New York’s Institute of Supply Management (Chart 5).

Chart 5

SOURCE:  Institute of Supply Management
NOTE: Values greater than 50 indicate accelerating economic activity, and values less than 50 indicate economic slowing.

Public Assistance

• The number of New York City residents receiving public assistance showed signs of leveling off in October, as the number of cash assistance recipients fell slightly to 388,654 and the number of Supplemental Nutrition Assistance Program (SNAP) recipients fell to 1.69 million (Chart 6).
• Since February, the number of cash assistance recipients has grown by 61,641 and the number of SNAP recipients has grown by 212,779.

Chart 6

SOURCE: New York City Department of Human Resources, HRA Monthly Fact Sheets.

MTA Subway and Bus Ridership

• Weekday ridership on the subway and MTA buses has fallen in the last couple weeks, following nearly two months of steady ridership levels. Over Monday, November 30^th through Wednesday, December 2^nd, an average of 1.62 million people rode the subway and about 950,000 rode MTA buses (Chart 7). It is too early to know if these declines are the beginning of a new trend or related to the Thanksgiving holiday.
• Compared to last year, ridership was down 72% on the subway and 58% on buses, as of December 2.

Chart 7

SOURCE: Metropolitan Transportation Authority, Day-by-Day Ridership Numbers.
NOTE: Excludes federal holidays.  Figures for the week ending December 4 include data through Wednesday, December 2.

Bicycling

• The bicycling boom that began in June continued through October, according to recent data from the City’s Department of Transportation. During the month of October, bike volume on the four East River bridges in DOT’s count totaled 638,042, an increase of more than 173,000 from last year. (Chart 8)
• The number of bikes crossing the Ed Koch Queensboro Bridge rose 50% to nearly 174,000 this October, as volume rose 40% on the Williamsburg Bridge and 36% on the Manhattan Bridge.
• Volume was up by 7% on the Brooklyn Bridge in October, reversing year-over-year declines in the prior three months.

Chart 8

SOURCE: New York City Department of Transportation, Bicycle Counts.
NOTE: Includes the Ed Koch Queensboro Bridge, the Manhattan Bridge, the Brooklyn Bridge and the Williamsburg Bridge.

City Finances

Tax Revenues

• FY 2021 year-to-date tax collections through October are $985 million (4.2%) above the City’s June Plan forecast, and 3.5% lower than the previous fiscal year (Table 2).
• Higher than expected revenues are driven primarily by higher income taxes. Personal income tax collections exceeded the forecast by $365 million, but are still almost 10% lower than the previous year.
• Business tax collections, including corporate and unincorporated business taxes, exceeded the forecast by a combined $378 million.
• Through October, collections from the real estate transaction taxes including mortgage recording tax and real property transfer tax were a combined $129 million higher than forecast, but 42% lower than in FY 2020.

Table 2: FY 2021 June Plan Forecast and Actual New York City Tax Collections Through October, $ in millions.

SOURCE: NYC Office of Management and Budget, Monthly Tax Collection Report & Tracking Report

COVID-19 Spending

• The City’s November 2020 Financial Plan includes $2.75 billion of COVID related spending in FY 2021, an increase of $2.63 billion from the June Plan estimate.
• Part of the increase is from the roll-in of FY 2020 expenditures which were $1.39 billion less than budgeted.
• Through December 2^nd, the City has committed to $2.49 billion of COVID related spending in FY 2021.
• In total, the City has incurred or committed to $5.11 billion of COVID related spending in FY 2020 and FY 2021 (Table 3).

Table 3: COVID-19 Expenditures, FY 2020 and FY 2021

SOURCE: Office of the Comptroller from FMS.

COVID-19 Contracts

• Through December 2^nd, the City has registered $4.41 billion in contracts to procure goods and services in response to the COVID pandemic (Table 4).
• More than 60% of the contracts, $2.68 billion, are for hotel and food related contracts and the procurement of personal protective equipment (PPE).
• Other significant contracts include $505 million for medical staffing for COVID-19, $149 million for ventilators and $100 million for testing centers.

Table 4: Registered COVID-19 Contracts through 12-2-2020

SOURCE: Office of the Comptroller analysis of NYC FMS data.
NOTE: Includes only contracts with COVID budget codes.

Cash Position

• The City’s central treasury balance (funds available for expenditure) stood at $2.26 billion as of Wednesday, December 2^nd. At the same time last year, the City had $1.85 billion (Chart 9).
• Taking advantage of a provision in the federal CARES Act, the City has deferred payment of payroll taxes since April, which has led to a net improvement in the City’s cash balances of approximately $1.2 billion. Deferrals will end by December 2020 and deferred payments will be due in 2 installments no later than December 2021 and December 2022. Deferred payments are accrued to the fiscal year in which they are due.
• The Comptroller’s Office’s review of the City’s cash position during the first quarter of FY 2021 and projections for cash balances through March 31, 2021, are available here.

Chart 9

SOURCE: Office of the NYC Comptroller

Spotlight of the Week

Urban Small Business Revenue

U.S. small businesses continue to be hit hard by the economic impacts of COVID-19. New York City small business revenue fell by 70% in the first wave of the pandemic, then gradually recovered through the end of July. But since early October, New York City revenue has been declining again as colder weather impacted outdoor dining and rising COVID rates have made many more cautious. As of November 15^th, New York City small business revenue was down by 50% from early January.

New York City small businesses have been impacted more than most U.S. cities, although currently business is down more in San Francisco (56%) and Washington DC (62%), where tech and government workers are more likely to be telecommuting from the suburbs than patronizing downtown businesses. As of November 16^th, small business revenue was down least in Los Angeles (25%), but rising COVID infections there and understaffed L.A. hospitals are pushing city and state officials to reconsider March-style lockdowns.

Chart S.1

SOURCE: Womply, via tracktherecovery.org

Within New York City, Manhattan remains hardest hit, as commuters from the outer boroughs and suburbs are still working remotely. Manhattan small business revenue recovered through the summer, and flattened in the fall, but has been declining again since early October. As of November 16^th small business revenue was down 68% in Manhattan, 35% in Queens, 34% in Brooklyn, and 23% in the Bronx.

Small business revenue was down least in Staten Island (16%), where COVID positivity rates are the highest in New York City. This mirrors the situation in Los Angeles, and highlights the unfortunate COVID dilemma of protecting public health versus protecting economic welfare. Too much emphasis on public health can lead to unsustainable economic damage and too much emphasis on economic welfare can put unbearable burdens on hospitals and healthcare workers.

Chart S.2

SOURCE: Womply, via tracktherecovery.org

Also of note, the July 31^st expiration of $600/weekly supplemental unemployment benefits coincided with a roughly 20% decline in small business revenue across the outer boroughs. Federal assistance is needed to help small businesses survive a difficult winter that is just getting started.