By Nathan Layne and Stephanie Kelly

(Reuters) – New York state saw a sharp drop in the number of people newly admitted to a hospital in the past 24 hours to the lowest level since the coronavirus outbreak began, a sign that social distancing steps were working, Governor Andrew Cuomo said on Thursday.

But Cuomo also disclosed that the number of deaths increased to 799 on Wednesday, a record high for a third day, and talked about a growing economic toll on the state that he said far exceeded the impact of the Sept. 11, 2001, attacks.

New York, the epicenter of the outbreak in the United States, has now recorded 7,067 deaths from COVID-19, the respiratory disease caused by the novel coronavirus, or nearly half of the total across the country.

Cuomo said he planned to bring in additional funeral directors to deal with the fallout of what he characterized as a “silent explosion” that has sent “ripples through society” and represented the “same evil” that terrorized New York in 2001.

Despite the growing toll, Cuomo said business and school closures and other social distancing measures had helped drive down new hospitalizations to just 200 people on Wednesday, a third of the level a day earlier and the lowest since the crisis began. He reiterated that New York was “flattening the curve”.

He warned, however, that any relaxing of the shutdowns risked ingniting new outbreaks, noting that the deadly Spanish influenza pandemic of 1918 had come in three waves.

He said total hospitalizations were trending at about 18,000, well under the state’s current hospital bed capacity of 90,000, but stressed that more dire models had predicted that New York could see hospitalizations of 110,000 or more.

“If we stop acting the way we are acting, you will see those numbers go up,” Cuomo said. “We can’t handle the worst-case scenario.”

Cuomo said New York was grappling with a $10 billion to $15 billion budget shortfall, and outlined a plan to freeze pay raises for state employees rather than lay people off.

He said the state had 1,000 employees working to process unemployment claims, which had overwhelmed its computer systems, and was working with Alphabet Inc’s Google to develop an online program to handle the claims.

Cuomo said that while the Sept. 11 attack was devastating from a cultural, emotional and physical perspective, the economic impact was far less than what the state was currently going through.

“This was a complete shutdown for now over one month of everything,” Cuomo said.

(reporting by Nathan Layne in Wilton, Connecticut, Maria Caspani in New York and Stephanie Kelly in Maplewood, New Jersey, Editing by Franklin Paul)