How to Judge the Pandemic’s Economic Outlook

Through what lens can we best see the pandemic’s economic outlook?

At 128 months, the longest economic expansion on record ended after last February:

Like the GDP, most metrics took a deep dive:

Compared to past recessions, the unemployment numbers have been the worst:

But should we focus on those numbers?

Let’s see what the economists have to say.

The Forum

Through the IGM forum, created by the University of Chicago’s Booth School, we can compare economists’ opinions on major public policy issues. A geographically diverse group, their political biases vary, they are old and young, and they specialize in different areas. All have auspicious scholarly credentials.

Starting last May, and continuing through today with multiple rounds, a series of IGM surveys displayed where 30 or so economists (the names and numbers varied) are pointing their economic outlook lenses. Fivethirtyeight gave us a summary.

The Pandemic’s Economic Outlook

Economists are most closely watching the GDP and the unemployment rate:

But they are also looking at high frequency data:

Our Bottom Line: High Frequency Data

When economists look at the BEA’s (U.S. Bureau of Economic Analysis) GDP and BLS (U.S. Bureau of Labor Statistics) unemployment numbers, they see the past. U.S. government agencies are telling us where we were. As a result, fivethirtyeight also asked economists how much they care about more contemporaneous data. To illustrate the pandemic’s economic outlook, they wondered about more recent consumer spending numbers, initial unemployment claims–the items in the second above chart. As you can see, they cared but not as much as for the larger, more traditional metrics.

More up-to-date, this data on consumer spending is from August 30:

I like to remember that “we treasure what we measure.” It reminds us that the data we select is what we try to boost.

My sources and resources: It’s always worth a look at Fivethirtyeight. Yesterday they conveyed how we might judge our economic outlook. Their data came from the IGM Forum at the University of Chicago’s Booth School. Meanwhile, remembering “we treasure what we measure,” the The Hamilton Project had five somewhat different figures for us to consider. Finally, for still another lens, do take a look at Opportunity Insights, Track the Recovery.