The Investopedia City Economic Recovery Tracker

Recovery scores for all 10 cities in Investopedia’s City Economic Recovery Tracker (CERT) advanced in leaps and bounds in May, with a strong average increase of 9.1 points, bringing the vast majority of cities in the index more than halfway back to early March 2020 levels. It was the best month since the onset of the pandemic in several categories, as vaccination levels surged nationwide, and cities across the country began to relax restrictions.

Gains were not spread equally, however, as vaccinations and reopening varied in different parts of the U.S. Massachusetts Governor Charlie Baker lifted all remaining COVID-19 restrictions on May 29, meaning that Boston’s recovery data currently reflects pandemic era limitations, with an uptick in activity expected in June’s figures. Relaxing restrictions in June after reaching the country’s 70% first-shot vaccination goal, New York City’s score is also expected to rise in the next month’s evaluation. 

Meanwhile, Houston slightly edged out Phoenix to lead the pack in its recovery as of May, with a score of 89 out of 100, with runner-up Phoenix just one point behind. Broken by category, both Houston and Phoenix stayed among the top in transit usage, small business hours worked, and restaurant reservations. The only category they did not perform well in was bringing down COVID-19 cases, which spiked in May. 

The city with the lowest recovery score was Washington D.C., now the only city measured with a score below 60. Its low score was largely attributed to lagging recovery in restaurant reservations, transit, small business hours worked, and UI claims.

Only half of the cities have surpassed a score of 70 so far, and how quickly the rest join the above-70 club depends on how soon they manage to reach COVID-19 vaccination targets, and regain sufficient consumer confidence to support a widespread rebound in economic activity. 

COVID-19 Cases Decline

COVID-19 cases fell substantially in every city in the index in May, with the greatest improvements in Philadelphia, Chicago, and New York City. This is the first instance since the index’s inception that every city had under 10 cases for every 100,000 individuals.

Nationwide, cases are on the downward trend as COVID-19 vaccine rates surge. Although Phoenix made the second-highest overall recovery score, it posted the most COVID-19 cases among all the cities measured in the index. Unsurprisingly, Los Angeles and Boston placed first and second in this category, respectively, consistent with higher first-shot vaccination rates in their home states of Massachusetts and California compared to others. 

The U.S. administered 320.7 million vaccines nationwide as of June 24, according to the Centers for Disease Control and Prevention (CDC). In California, 45% of eligible adults have received both vaccine doses, while the percentage is 49% in New York and 57% in Massachusetts, according to VeryWell Health. Arizona lagged behind with only 37% fully vaccinated.

Unemployment Drops

Most cities in the index had fewer unemployment claims in May, with all but New York City and Chicago experiencing marked improvement. Houston and Phoenix made the most progress, and are now effectively back to pre-pandemic rates of UI claims. Chicago was the furthest from complete recovery, with May UI claims up 305% from 2019 levels. 

Cities that performed poorly in this category for exceeding 2019 UI claims did not necessarily have higher overall unemployment rates. The BLS reported unemployment rates of 7.1% and 7.2% for Houston and D.C., respectively, which represent both the top and second-to-last cities in this category by rank. 

The U.S. economy added 559,000 jobs in May, just over double the jobs added in April, signaling employers’ growing confidence in the country’s economic recovery.

Restaurant Reservations Take Off

Restaurant reservations jumped in every city in the index except for Philadelphia in May. It was the best month for restaurant reservations since the start of the pandemic. Eastern seaboard cities like Boston and Washington, D.C. reported the greatest changes, though not quite catching up with earlier gains made by warmer weather locales like Phoenix and Houston, which have both returned to 2019 reservation numbers.

The only city that declined in reservations was Philadelphia, hovering at half of pre-pandemic reservation levels. However, Philadelphia’s recovery still outpaces that of New York City as a percentage of 2019 levels, which stands at 41% of the way to full recovery.

With more of the country vaccinated, and COVID-19-related restrictions like indoor capacity relaxed in many states, the restaurant industry appears to be gaining momentum.

Public Transit Races Gains Ground

Almost every city in the index made progress in public transit ridership in May. Seattle advanced the most, increasing it’s score by 9 points in a single month. Overall, Phoenix and Houston still ranked first and second at scores of 83 and 79, respectively. Boston and Chicago moved 6 points, while most others shifted only slightly in the positive direction. Philadelphia and Phoenix were the only two cities in the index that did not see positive movement in May.

Small Businesses Make Incremental Progress

For small businesses in most cities in the index, little changed between April and May, observing gains and losses of under three points. Phoenix and Houston maintained the best scores overall, at 89 and 80, respectively, while Philadephia came in last at 59.

Philadelphia was the only city that has not reached a score of 60, with many pandemic-related limitations still in place for private businesses in May. On June 11, Philadelphia dropped most remaining restrictions, the impact of which will become clearer in June’s data. Like New York City and others, Philadelphia will still require masks in some public venues including vaccination centers, prisons, shelters, and schools. 

Just a handful of points ahead of Philadelphia, middle-of-the-pack cities Boston, D.C., and Chicago hardly budged. Like Philadelphia, these cities only scaled back remaining COVID-19 restrictions as of late May (in the case of Boston), and early June, not yet reflected in May’s index.

Other cities hovered at or slightly above two-thirds of the way to full recovery, with leaders Houston and Phoenix carrying best scores for transit usage, UI claims, and restaurant reservations in tandem with small business hours. 

Data by Amanda Morelli/Adrian Nesta. Additional reporting by Kara Greenberg.