Real-Time Survey to Provide Timelier Labor Market Data in Era of COVID-19
An effective economic policy response to the rapidly evolving coronavirus (COVID-19) crisis requires timely and accurate information on its impact. Most traditional economic statistics, such as employment data, fail in this regard because they are released with a significant lag.
To help reduce the information gap, we introduce the Real-Time Population Survey (RPS), an online survey of adults that are representative of the U.S. population along several key characteristics. The central goal of the RPS is to document labor market trends in real time and at a higher frequency than official statistics.
Introducing the Real-Time Population Survey
The RPS was developed by Alexander Bick and Adam Blandin and outlined in “Real-Time Labor Market Estimates During the 2020 Coronavirus Outbreak.’’ It was initially completed in late March and early April 2020. In the future, the RPS will be conducted in partnership with the Federal Reserve Bank of Dallas.
The core of the RPS closely follows the main labor market questions in the Current Population Survey (CPS), the primary household survey of the Bureau of Labor Statistics (BLS). The RPS generates real-time labor market statistics that are consistent with the official measures but are available up to six weeks earlier and updated twice as often.
For example, the BLS jobs report for April, released May 8, is based on survey responses collected three weeks earlier (the week of April 12–18). The next report is due June 5. This gap in information about labor market conditions has left policymakers “flying blind” to a significant degree. The RPS also includes specific questions tailored to the present economic situation that are not asked in the CPS, which underlies the jobs report.
Labor Market Since Mid-April: Latest Results from the RPS
We are releasing the results from the third survey wave of the RPS, covering the week of April 26–May 2. These figures are significantly more recent than the BLS’ April 12–18 survey. Key RPS takeaways:
- The RPS survey suggests that employment losses have continued since the week of the BLS survey, however, at a slower pace than before mid-April. In the week of April 26–May 2, the employment rate in the RPS was 51.4 percent among working-age adults (18-64), down about 3.5 percentage points from mid-April.
- The RPS measure of the unemployment rate rose since mid-April, to 23.6 percent, while the labor force participation rate remained fairly flat.
- More than half (55 percent) of the people who lost their job in March or April believe they could return to their job if the economy and daycare/school facilities reopened soon and in a safe manner, while 16 percent were unsure and 29 percent believed that their job loss was permanent.
- Around 10 percent of the nonemployed in the survey still plan to apply for unemployment insurance over the next weeks.
Comparing Earlier RPS Waves with April Jobs Report
Earlier RPS question responses produced results highly consistent with those in the February CPS. The April BLS jobs report, released last Friday, offers the first opportunity for a current assessment of the RPS, whose findings were available three weeks ago.
The BLS report found that the share of working-age adults (18–64) employed declined from 72.7 percent the week of March 8–14 to 62.7 the week of April 12–18 (Chart 1). By comparison, the RPS found that the employment rate among working-age adults was considerably lower at 54.9 percent in that same week in April.
However, the BLS estimates that over 7 million individuals “with a job but absent from work because of the coronavirus” were misclassified as employed during the CPS interviewing process. In contrast, the RPS did not record an unusually high number of persons not at work, suggesting the same misclassification did not occur. Reclassifying the individuals absent from work in the CPS survey as suggested by the BLS leads to an adjusted employment rate among working-age adults of 59.0 percent the week of April 12–18. This is much closer but still substantially above the employment rate estimated in the RPS survey.
The BLS report found that labor force participation among working-age adults decreased from 76.1 percent to 73.0 percent. This decline may understate the true decline in participation, because those individuals misclassified in the CPS survey as employed are automatically counted as in the labor force. Depending on what fraction would have reported being unavailable for work had they been asked, the official labor force participation rate would have been between 69.4 percent and 73.0 percent. For comparison, the RPS measure of the participation rate among working-age adults for the week of April 12–18 was 66.6 percent.
The official unemployment rate among working-age adults was 14.2 percent in the April BLS report. Reclassifying all persons not at work because of the virus as unemployed would bring this rate up to 19.1 percent. Reclassifying all persons not at work as out of the labor force would result in an unemployment rate among working-age adults of 14.9 percent. The RPS measure of unemployment for the week of April 12–18 was 17.6 percent, a value that lies in between the range of 14.9 percent to 19.1 percent.
There can be little doubt that the scale and speed of the change in employment since the outbreak of COVID-19 is unprecedented. Overall, the RPS results for the week of April 12–18 indicate larger decreases in the employment and labor force participation rates and a larger increase in the unemployment rate than the headline numbers in the April BLS report. To the extent that individuals “with a job but absent from work because of the coronavirus” are classified in the CPS survey as nonemployed, we expect that the official statistics over the coming months will align more closely with the RPS.
Additional RPS Information for April
We emphasize two other findings from the mid-April wave of the RPS.
First, the decline in the aggregate supply of labor was larger than suggested by the decline in employment alone. The aggregate supply of labor is the product of two components: the number of employed and the average hours worked per employed person. About 20 percent of the decline in aggregate labor supply between March and April was due to lower hours per worker, according to the RPS.
Second, many workers reported losses in earnings (Chart 2).
Overall, about 42 percent of respondents reported lower labor earnings in mid-April compared with February; 25.8 percent had no labor earnings because they were not working, while the other 15.7 percent were still working but earning less.
The next release of the Real-Time Population Survey is scheduled for May 22.