MAPPING THE COVID-19 RECESSION: How Are Montana and Its Metropolitan Areas Fairing?

• Author: Polzin, Paul E.
• Position: TRENDING

Economists are sometimes accused of having little foresight, like a driver traveling at 90 mph with their eyes on the rearview mirror. But accurate economic analysis requires up-to-date information, and therein lies the rub. It takes time to gather, compile, verify and publish the data. By the time these steps are taken, it may appear that the figures are already out-of-date.

The current COVID-19 crisis is a prime example. The economy was barreling along in January and February of 2020, with record low unemployment and respectable growth. Then the world stopped in mid-March. When it resumed, it was on a different course. Much of the economic data, which is released annually or perhaps quarterly, simply can't describe recent events.

There is one source of timely up-to-date data that can provide information; the Current Employment Survey (CES). Each month the U.S. Bureau of the Labor Statistics surveys about 697,000 work sites in the country and tallies the number of workers, as of the 12th of the month. The number of workers are reported nationwide, statewide and for each major metropolitan statistical area (MSA).

This data source is not perfect, because the figures are based on samples and are frequently revised. But if we are careful, and do not try to be too precise, the CES data can provide a picture of the latest trends. The following sections use the monthly CES data to track the COVID-19 recession in the U.S., Montana and several of the state's major urban areas, since February 2020. Later data for gross domestic product and income will provide further information.

The U.S. Economy

The seasonally adjusted monthly data for U.S. nonfarm employment are shown in Figure 1. Nonfarm employment is the best overall indicator of short-run trends. Data for wages and income may be skewed by the massive income payments made by the federal government since the onset of the COVID-19 crisis.

The rapid COVID-19 shutdowns during March and April of 2020 are clearly shown in the data. Total U.S. nonfarm employment declined by more than 22 million jobs from February to April, a decline of about 14.5%. We haven't done an extensive historical search, but such a decrease has to be among the greatest month-to-month declines in recent history. There is no question that the U.S. economy went into a free fall in the spring of 2020.

Since the decline, the U.S. has posted a number of months of employment growth. By August 2020, the number of nonfarm jobs increased...