Puerto Rico’s economy recovering from COVID-19 lockdown

Bonds

Statistics show that Puerto Rico’s economy bounced back in September and October from the spring COVID-19 lockdown.

Puerto Rico bondholders and the Puerto Rico Oversight Board have been using economic developments on the island to justify smaller or larger haircuts on the bonds in restructuring negotiations.

In September the island’s Economic Activity Index rose by 1.2% from August. On Friday the Economic Development Bank for Puerto Rico released the September value.

Bloomberg News

According to the U.S. Bureau of Labor Statistics’ household survey, from September to October the island’s total employment rose 0.1%.

According to the bureau’s survey of employers, Puerto Rico’s total nonfarm employment was up 0.17% in October from September. Private sector nonfarm employment was up 1.07% in the same period. This survey excludes self-employment.

However, from a longer-term perspective Puerto Rico’s economy is in decline.

The September economic activity index was down 6.3% from the value for September 2019 and down 8.9% from the value for September 2015.

The bureau’s household survey showed total employment in October down 2.4% from October 2019 and 3.7% from October 2015.

According to the employer survey, employment in October was down 7% from October 2019 and 8.5% from October 2015. The percent declines for nonfarm private sector employment were 8.8% from October 2019 and 6.9% from October 2015.

While Gov. Wanda Vázquez retained some restrictions on business on the island in August and September, they are substantially looser than they were in the spring.

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