Together with Moody's Analytics, CNN recently came out with a new measure of the economy. It is called the "Back-to-Normal" Index. The index hit a low point of 59% of normal in mid-April, which was during the height of the economic shutdown. By mid-August we were at 78% of normal. By our count that means we are just about 50% of the way back. It stands to reason that the first sector of the recovery would be the easiest to achieve. In other words, progress from here may take longer.
Last Friday we received a reading which gives us another indication of where we stand. In August we gained just under 1.4 million jobs. That means we have gained approximately 50% of the 22 million jobs we have lost during the shutdown. The unemployment rate sits at 8.4%, which is down from just under 15.0% at the peak and just about 60% of the way back from the low of just under 4.0%. You can see from these numbers that the jobs report is an important indicator of normalcy as well.
We will see another jobs report for September before we see the release which tells us how the economy performed in the third quarter (The GDP). If these first two indicators are correct, then we should see a bounce of close to 20% in the economy during the quarter. That would put us 50% of the way back based upon the almost 40% drop in the first two quarters of the year. Looking at the progress we have made gives us not only an idea of how close we are to recovering, but also how far we have come.