# Economic Datain the Age of COVID-19

Dr. Steven N. Weisbart, CLU, Triple-I Senior Vice President and Chief Economist

COVID-19 pandemic has not only disrupted our economy – it has complicated the data we routinely use to understand economic developments. This is a bit like finding out the thermometer you use to tell if you have a fever is unreliable.

Here are two examples of why it’s hard to know what’s happening.

What is the correct unemployment rate?

The April 2020 Bureau of Labor Statistics (BLS) employment report said the U-3 rate – just one of six unemployment measures BLS reports – was 14.75 percent. This number is derived by dividing the number of people counted as unemployed (23.078 million) by the civilian labor force (156.481 million), which is everyone who is either working or unemployed and looking for work.

But when the virus was recognized as a major public health threat in mid-March and April and many businesses and organizations were shut down, throwing many millions out of work, some who were affected decided to retire. This means they were no longer counted as part of the civilian labor force. This is most vividly seen by comparing the civilian labor force in February (164.6 million) with its count in April (156.5 million)—a drop of 8.1 million.

The large number of retirees affected the unemployment rate: if they had not retired, most would likely have been counted as unemployed. To keep the math in our example simple, let’s say 7 million of the retirees had remained in the labor force and been counted as unemployed (maybe the other 1 million would have retired then anyway—virus or no virus). The unemployment count would have been 30 million (23 million counted plus 7 million un-retirees) and the civilian labor force would have been 163.5 million (156.5 counted plus 7 million un-retirees).

The unemployment rate would have been announced as 30 million divided by 163.5 million, or 18.35 percent, instead of 14.75 percent.

So, which one is correct?