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Illustration: Aïda Amer/Axios

If you don't know how broken something is, you're not going to be able to fix it.

  • That's the crisis facing policymakers trying to repair a devastated economy without knowing the true degree to which the pandemic has hurt the country.

Why it matters: Some parts of what ails America, like the nascent mental-health crisis, are by their nature hard to measure. But other aspects of the recession, like the unemployment rate or national GDP, are foundational statistics upon which multi-trillion-dollar decisions are made.

  • Never in living memory have those statistics been less reliable.
Data: BLS; Chart: Axios Visuals

How it works: The unemployment rate — the single most important statistical data point in America — is derived from a survey of a representative sample of Americans who are asked whether they worked in the past week.

  • Historically, more than nine out of 10 Americans answered the questions. That ratio has been falling in recent years, but during the pandemic it has plunged to just two in three.

The survey is also long overdue for a fundamental overhaul. The last such revamp took place in 1994, before the internet transformed the nature of work.

The catch: The Bureau of Labor Statistics has been perennially underfunded, with the result that it now employs fewer than 2,000 full-time-equivalent staffers.

  • That's a decline of more than 20% from 1990s levels, even as the complexity of the workforce — and the difficulty of accurately measuring it — has increased dramatically.

Other data series are similarly troubled. The national homeownership rate increased a stunning and unprecedented 3.3 percentage points in the first half of this year, for instance — something no analyst even thought possible. That might reflect a fast-changing reality, or it could also be a statistical anomaly.

  • The Census bureau, which calculates the homeownership rate, reports a response rate of just 64.9% for its June survey, down from 82.7% a year previously. If renters were significantly less likely to respond than homeowners, that could account for all or most of the rise in the official statistic.

The intrigue: International comparisons have become more difficult than ever.

  • America's GDP officially shrank by 9.5% in the second quarter, while the UK's shrank more than twice as much, at 20.4%.
  • Again, it's impossible to know whether that reflects a much more gruesome economic reality in Great Britain, or whether it, too, is a weird statistical artifact.

The bottom line: "There’s nothing like a crisis to shine a light on inadequacies that need addressing," says Erica Groshen, a former BLS leader who's now at Cornell University.

  • "There's a little hole in the roof that was sometimes damp, and then a storm comes through. A crisis like this reveals a lot of those things. It is stressing many of our systems, and you can see that in the statistics."

Go deeper

Dion Rabouin, author of Markets
Oct 9, 2020 - Economy & Business

As job losses continue, doubts are rising about unemployment data

Data: U.S. Department of Labor; Chart: Andrew Witherspoon/Axios

More than 25.5 million people were collecting unemployment benefits as of mid-September, and nearly 1.3 million people filed first-time jobless claims last week — more than 800,000 for traditional unemployment and 464,000 for the Pandemic Unemployment Assistance program.

The state of play: That number excluded any new claims from the largest state in the country, California, which paused its program to implement fraud prevention technology and comb through a backlog of claims that had reached nearly 600,000 and was growing by 10,000 a day.

4 mins ago - Politics & Policy

Beto not even best Dem against Abbott

Beto O'Rourke speaks at a rally at the Texas State Capitol in June. Photo: Sergio Flores/Getty Images

Actor Matthew McConaughey’s nine-point lead in a theoretical matchup against Greg Abbott shows just how vulnerable the hard-right Texas governor could be in a general election.

Why it matters: Abbott has won conservative accolades for his abortion, mask and vaccine bans. Axios reported Sunday that former Rep. Beto O’Rourke is preparing to announce a gubernatorial challenge — but a recent poll shows he’s not even the most popular Democrat in the state.

Delayed maps upend midterm campaigns

Illustration: Shoshana Gordon/Axios

Midterm candidates are panicking about how the congressional maps will ultimately be drawn, with several strategists telling Axios campaigns are in limbo.

Why it matters: Candidates are unsure if the district they're targeting will remain intact or be reshaped by the process. The uncertainty is especially vexing to Democrats, who are vying to maintain their narrow margin in the House.

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