Economy has Recovered 91% of its Recession Loss
Peter Bernstein, Vice President, pbernstein@rcfecon.com, 312-431-1540 x1515
RCF’s February Recovery Scorecard shows the economy has recovered 91% of its recession loss, up from an 87% recovery recorded in our January scorecard. [Note that since economic data are released with a lag, the February report includes some data from January.] After stalling in December, the recovery picked up its pace in the last two months. Three of our measures already exceed their previous peaks: Real Durable Goods, Building Permits, and Home Sales. Compared with our January scorecard, 13 of our 16 measures improved, but three took a step back: Real Income less Transfers, Full-Time Employment, and Housing Starts.
Recovery Progress by Economic Variable
Notes and methodology: All data are seasonally adjusted monthly values. Variables 4 through 9 are data from February; all others are from January. Example calculation for economic variable #1, real income less government transfers fell 8.1% from its February 2020 value to its low point in April 2020. In the latest available report, the variable was 2.8% below its peak value. Therefore, it has recovered 66% 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.
Employment measures continue to lag in this recovery, as is typically the case. In the mild 2001 recession, real GDP recovered its loss in 6 months, but it took employment 3 years to return to its pre-recession peak. In the Great Recession, real GDP recovered in two years; employment took five years. So, even though it is likely that GDP will fully recover some time this year, a full employment recovery could still be years away.
Appendix – Recent History of Recovery Scorecard
Monthly Recovery Percentages
