Economic Recovery Scorecard – November 2021

RCF Scorecard Shows Economy Fully Recovered from Recession

Peter Bernstein, Chief Economist,, 312-431-1540 x1515

The combination of continued strength in consumer spending along with upward revisions to other data put the RCF Recovery measure at 101%.  This is the first time since the pandemic recession that the index surpassed 100% meaning that on average and across all our 16 metrics, the economy is now at a higher level than it was since the sharp economic decline in 2020.  The same holds true for real GDP, a quarterly measure not included in our monthly scorecard.  In third quarter, it was 1.4% above its previous peak value from the fourth quarter of 2019.

The most recent data show 12 of our 16 measures improved and 8 have surpassed their pre-recession peaks.  Importantly, all six of our labor market measures improved.  Even though they have not fully recovered, the labor market appears to be catching up to the rest of the economy.   Notably, full-time employment, the number of unemployed, the unemployment rate, and new unemployment claims have recovered more than 90% of their recession losses.

Notes and methodology:  All data are seasonally adjusted monthly values.  Variables 4 through 9, and 13 are data from November; all others are from October.  Example calculation for economic variable #1, real income less government transfers fell 8.0% from its February 2020 value to its low point in April 2020.  In the latest available report, the variable was 0.8% above its peak value.  Therefore, it has recovered 110% of the loss. Data Sources: #1, 2, 3, 12, 13: Bureau of Economic Analysis; #4, 5, 6, 7, 8:  Bureau of Labor Statistics; #9: U.S. Employment and Training Administration; #10: Federal Reserve; #11: Bureau of the Census; #14, 15: Bureau of the Census and U.S. Department of Housing and Urban Development, #16:  National Association of Realtors.

But What Does 100% Recovery Mean? 

Our measure of the degree of economic recovery is based on a comparison of current levels with previous peak values.  For example, real income less transfers – an excellent measure because it removes the impact of the increase in government payments to individuals and because it adjusts for the increase in prices – is higher now than it was in February 2020.  In a broader sense, one would expect this variable to increase over time since that has been its historical trend.  For example, in the five years prior to the recession, real income less transfers grew by about 2.5% per year. 

Therefore, another way to measure the recovery is the current value versus its trend value.  That comparison is presented below, and it shows that real income less transfers are still about 3% below the level it would have reached if it had continued growing at its historical trend.   The same analysis applies to other variables which also have a historical upward trend.  For example, payroll employment is about 4 million jobs lower than in February 2020.  Compared to trend growth, however, the employment gap is around 7 million jobs. 

Source: U.S. Bureau of Economic Analysis

Nonetheless, our scorecard is a useful measure.  Hypothetical measures of where the economy could have been absent the pandemic recession have their place, but ultimately it is a comparison of actual values pre- and post-recession that tell us how the economy is faring.  And by that standard, the improvement is clear cut. 

Appendix – Recent History of Recovery Scorecard

Note:  Historical data are often revised so comparisons with earlier RCF Scorecards may reflect the impact of revisions. 

Monthly Recovery Percentages