COVID Economic Statistics

Some economic statistics that the government reports every month look odd due to the COVID economic shutdown and what resulted from it. Don’t get too excited about any good news, other than to make sure that the trend is in the right direction.

Nonfarm Payrolls

After all of this time, the Bureau of Labor divides workers into two piles: Farm and Non-Farm. Seems like they should expand the categories a little more as we move away from an agrarian society. Regardless of that, non-farm payrolls added 2.5 million jobs in May. Sounds great, but it represented only 11% of the 22.1 jobs lost in the previous two months, meaning that 89% of the people who lost jobs were still out of work as of June 1. The stock market may have substantially recovered, but the job market still has a long way to go.

Savings Rate

What do you do with your money when restaurants, bars, theaters, most stores, sports, and Vegas are all closed? Save it – and hopefully you were able to boost your own savings. The savings rate was 33% in April, which was the highest figure ever since the Bureau of Economic Analysis started reporting it in 1959. For those who think people spend too much and save too little, April should have been the realization of their dreams! Yet, here we are in a recession. Savings is good for people, but when the economy is stalled and banks aren’t lending, then an increased savings rate doesn’t boost the economy as much as it might with a full throttle economy. Again, don’t get too excited now about a higher savings rate.

Personal Income

Personal income jumped 10.5% in April – the May personal income report is expected this Friday. This would ordinarily be incredible news, but the April rise was substantially due to government transfer payments: PPP loans, enhanced unemployment payments, and the like. The April jump was not due to increased private sector economic activity. Again, don’t get too excited, even if the May report when it comes out on Friday is a good number.


In order to try to help people and businesses, the US government borrowed Trillions of dollars in order to print more money during the COVID outbreak. This policy caused several economic statistics to look wacky. I recommend you keep perspective in mind as you digest these statistics. I believe the recovery will take several years, meaning it will be several years before US GDP will get back to where it was pre-COVID and the unemployment rate will dip to the mid-single digits. Aging demographics don’t help as younger people are typically quicker to adapt. COVID really whacked us and we will be reeling for a long time.

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