How The Experts Are Measuring The Economic Recovery

摘要： In early June, the National Bureau of Economic Research made it official: The United States was in a full-blown recession. Joblessness had risen to historic levels, total production was down, and industrial activity slowed to a crawl. Just like that, the COVID-19 pandemic had extinguished the longest period of expansion in U.S. history.

In early June, the National Bureau of Economic Research made it official: The United States was in a full-blown recession. Joblessness had risen to historic levels, total production was down, and industrial activity slowed to a crawl. Just like that, the COVID-19 pandemic had extinguished the longest period of expansion in U.S. history.

Ever since, the signs of recovery have been confusingly mixed — unemployment has improved more quickly than expected and the stock market has shown surprising resilience, but other indicators have looked much worse. So how can we know when the economy is truly recovering? As part of our ongoing survey of economists, conducted in partnership with the Initiative on Global Markets at the University of Chicago Booth School of Business, we asked experts which metrics they have their eye on to judge the strength of the recovery now — and what they’re looking at to predict where the economy might be headed next.

[Related: Where The Latest COVID-19 Models Think We’re Headed — And Why They Disagree]

In terms of measuring the recovery, economists are looking most closely at gross domestic product. Given three options to describe the level of attention they paid to GDP, 81 percent of our respondents said they were watching it “very closely,” with another 16 percent saying they were looking at GDP “somewhat closely” and only 3 percent saying they weren’t following it closely at all.

The next-most watched statistic was the unemployment rate, which also shouldn’t be surprising; both GDP and unemployment are key lagging indicators, or important metrics that show how the economy has been doing. According to the survey, retail and food sales also belong in that category — particularly in this pandemic, since the hospitality and retail sectors are among the industries harmed most when virus-related shutdowns force businesses to close.

Based on the three main indicators economists said they’re using to judge the recovery, America has a long way to go before things are back to their pre-pandemic baseline.

After mostly cruising along at between 2 and 3.5 percent annualized quarter-over-quarter growth for years, real GDP dropped by an annualized rate of 5 percent from the fourth quarter of 2019 to the first quarter of 2020, which contained only about one month of coronavirus-related effects (although the National Bureau of Economic Research says the recession technically began in February 2020). The Federal Reserve Bank of Atlanta’s GDPNow model estimates that second-quarter real GDP will end up being down by an annualized rate of 35.5 percent — seven times worse than the first quarter — when the Bureau of Economic Analysis releases its official number later this month.

[Related: The Economy Is A Mess. So Why Isn’t The Stock Market?]

Similarly, the unemployment rate is currently 11.1 percent, an increase of 7.6 percentage points from February — and still higher than any level it had reached from 1948 through March 2020.1 When the Congressional Budget Office released an update to its long-term forecast for the decade earlier this month, it projected that the unemployment rate would remain above its pre-pandemic level for the rest of the decade.

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