New York by the Numbers
Weekly Economic and Fiscal Outlook

A Message from the Comptroller

We are living through extraordinary times – as a nation, as a City, and as individuals and communities.  A pandemic is raging that has no parallel in the past century. And in an unprecedented move, our economy was put on hold in order to protect lives and “flatten the curve,” resulting in mass layoffs and lost income for hundreds of thousands of New Yorkers, and a dramatic drop in tax revenues.  In these difficult and uncertain times, I offer this weekly update on the state of our City’s economy and finances in order to provide the public, elected officials, advocates and experts with a clear-eyed, sober assessment of the challenges.

Make no mistake – New York City will recover. Together we have overcome many challenges, and I know we will rise to the one ahead.

Sincerely,

Scott M. Stringer

The Economy

National Indicators

• Initial claims for unemployment insurance fell modestly to 1.31 million for the week ending July 4^th (Chart 1). Continuing claims also continued their steady decline during the week ending June 27^th, to 18.1 million, from an adjusted 18.8 million in the prior week.

Chart 1

• Pandemic Unemployment Assistance (PUA) initial claims rose for the 4^th week in a row, to 1.04 million. Continuing claims also rose, by 1.51 million for the week ending June 20^th (latest available) to a total of 14.4 million.  PUA, enacted as part of the CARES Act, covers workers who are typically not eligible for state unemployment benefits, including the self-employed or those unable to work due to COVID-19.
• Regular and PUA continuing claims together cover over 31.8 million unemployed Americans (Chart 2).

Chart 2

New York City

• Initial unemployment claims by New York City residents ticked up last week, to 48,261 (Chart 3). Initial claims have been essentially flat for the past six weeks.

Chart 3

SOURCE: NYS DOL

• During the week beginning July 6^th (through Thursday), average weekday MTA subway ridership rose slightly to 1.15 million, a slight increase from the previous week. Average weekday bus ridership was essentially flat at 1.12 million (Chart 4).
• Average weekday ridership has gradually expanded since mid-April after reaching a low of 416,500 subway riders during the week ending April 17 and 428,700 bus riders during the week ending April 10. Prior to the shutdown, weekday ridership averaged 5.4 million on subways and 2.2 million on buses.

Chart 4

SOURCE: Metropolitan Transportation Authority, Day-by-Day Ridership Numbers.

NOTE: Excludes holidays.  Figures for the week ending July 10 includes data through Thursday, July 9.

City Finances

Revenues

Since March there has been a sharp decline in both business taxes – the General Corporation Tax (GCT), which applies to corporations doing business in the City, and the Unincorporated Business Tax (UBT), which applies to non-corporate businesses, such as partnerships and sole proprietorships (Chart 5).

Tax on City businesses (both incorporated and unincorporated) accounted for nearly $7 billion dollars of revenue in 2019 — $4.7 billion from the GCT and $2.1 billion from the UBT.

Prior to the pandemic, revenue from the GCT had been growing very strongly, by almost 26 percent on a year-over-year basis, more than offsetting a 4 percent decline in the UBT. Since March, however, growth in the GCT has vanished, and the decline in the UBT has become more pronounced.

Chart 5

SOURCE: Office of the Comptroller from Financial Management System.

NOTE: June figures are preliminary.

COVID Spending

The final modified FY 2020 budget for COVID-related spending is $4.01 billion (Table 1). One third of the budget, $1.34 billion, is for medical, surgical and laboratory supplies. The modified budget also anticipates that $351 million of employee health insurance expenditures will be eligible for Federal COVID reimbursement.

Of the total authorized COVID budget, $2.72 billion has been committed – that is, the City has incurred obligations for that amount – as of July 9. Medical, surgical and lab supplies account for $1.27 billion of the commitments. Of the total commitments, $1.41 billion has been expended.

Table 1: COVID19 Budget and Expenditures, FY 2020

SOURCE: Office of the Comptroller from FMS.

NOTE: Expenditures in Dept. of Emergency Management and Dept. of Education are net of expenditures for food and forage, shown separately.

COVID Contracts

Through July 9, the City has registered $3.26 billion in contracts to procure goods and services in response to the COVID pandemic (Table 2). More than a quarter of the contracts, $883 million, are for the procurement of personal protective equipment (PPE). Other significant contracts include $505 million for medical staffing for COVID-19, food related contracts for $620 million, $349 million for hotels, $146 million for ventilators and $100 million for testing centers.

Table 2: Registered COVID Contracts through 7-9-2020

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 $12.180 billion as of Thursday, July 9. At the same time last year, the City had $10.694 billion (Chart 6).
• The Comptroller’s Office’s review of the City’s cash position during the first quarter and projections for cash balances through September 30^th, 2020, are available here.

Chart 6

Spotlight of the Week

Earnings During the Pandemic: A Tale of Two Economies

A seemingly surprising aspect of the COVID recession has been the dramatic uptick in average hourly earnings, which jumped a huge 4.7% nationally in April – even as the economy shed nearly 20 million jobs – and remained 3.6% above their March level in June.  But the increase in average earnings of the employed simply serves to highlight that job losses during the recession were concentrated among the lowest earners, while higher earners tended to experience much lower rates of job losses.

Chart 7

SOURCE: BLS

Between February, the last full month prior to widespread business shutdowns beginning in mid-March, and April, the low point for employment, job losses were steepest in relatively low-paying sectors, including Leisure and Hospitality, Retail Trade, and Personal Services.  In contrast, higher-paid sectors, such as Securities, Information, and Professional Technical Services, lost many fewer jobs.  Employment and earnings data from the Bureau of Labor Statistics suggests that those who lost jobs earned an average of approximately $700 per week, compared to those who remained employed, who earn roughly $1,025 per week – or about 45% more.

SOURCE: BLS