D2.Eco.11.6-8: Using Data to Check the State of the Economy

Overview

Lesson Procedure

60-70 minutes of class time across 5 phases.

1. Warm-Up5-10 minutes
2. Direct Instruction15-20 minutes
3. Guided Practice15 minutes
4. Independent Practice15 minutes
5. Closure10 minutes

1. Warm-Up5-10 minutes

   Warm-Up Prompt

   "One adult tells you, 'The economy is great right now.' Another says, 'The economy is terrible.' What would you want to count or measure to decide who is closer to the truth? List three things."

   Collect answers on the board and group them. Students usually name jobs, prices and pay. Add the six measures from the indicator: employment, unemployment, inflation, total production, income and economic growth. Tell students that government agencies publish all six every month or every quarter, and that today they will learn to read the numbers and judge them like an economist: with data, not with a feeling.

2. Direct Instruction15-20 minutes

   Key terms for D2.Eco.11.6-8 (working definitions)

   Measure	What it counts	How to calculate or read it
   Employment	The number of people who have jobs	Compare the number employed this year with last year
   Labor force	People who have a job plus people who are looking for one	Employed + unemployed
   Unemployment rate	The share of the labor force that has no job but is looking and available	Unemployed / labor force x 100
   Inflation	A rise in the general level of prices; the inflation rate is how fast prices rise	Percent change in a price index such as the Consumer Price Index (CPI), which tracks the cost of a typical basket of goods
   Total production (real GDP)	The value of all final goods and services produced in a year, measured in the prices of one base year so price changes do not count	Read in billions or trillions of dollars
   Real disposable income per person	Income after taxes, divided by the population and adjusted for inflation, so it shows buying power	Compare years; a rise means more buying power for the average person
   Economic growth	An increase in real GDP from one year to the next	Percent change in real GDP

   Part 1: One formula does most of the work. Inflation, growth and changes in income are all percent changes: (new - old) / old x 100. The unemployment rate is a share: unemployed / labor force x 100. Show Diagram 1 to explain the labor force, then Diagram 2 to show total production. Then hand out the data table and work the examples below with the class.

   U.S. economy, 2019-2025 (real data: BLS Current Population Survey Table 1 annual averages; BLS CPI-U U.S. city average, annual averages, 1982-84 = 100; BEA National Income and Product Accounts Tables 1.1.6 and 2.1). The 2025 job numbers are averages of 11 months because October 2025 data were not collected, and BLS notes that the new population controls it introduces each January also affect comparisons of job levels between years.

   Year	Labor force (thousands)	Employed (thousands)	Unemployed (thousands)	CPI-U (price index)	Real GDP (billions of 2017 dollars)	Real disposable income per person (2017 dollars)
   2019	163,539	157,538	6,001	255.657	20,716	47,249
   2020	160,742	147,795	12,947	258.811	20,285	50,049
   2021	161,204	152,581	8,623	270.970	21,556	51,939
   2022	164,287	158,291	5,996	292.655	22,080	48,754
   2023	167,116	161,037	6,080	304.702	22,724	51,226
   2024	168,106	161,346	6,761	313.689	23,395	52,418
   2025	170,807	163,493	7,314	321.943	23,943	52,986

   • Unemployment (real data)

     Use the table. In 2020, the year the COVID-19 pandemic closed many businesses, 12,947 thousand people were unemployed and the labor force was 160,742 thousand. What was the unemployment rate?

     Result: 12,947 / 160,742 x 100 = 8.05..., about 8.1%. In 2019 it was 6,001 / 163,539, about 3.7%, so the rate more than doubled: a sign of a weak labor market.

   • Employment (real data)

     How did the number of employed people change from 2019 to 2020?

     Result: 147,795 - 157,538 = -9,743 thousand. About 9.7 million fewer people had jobs.

   • Inflation (real data)

     The CPI was 258.811 in 2020 and 270.970 in 2021. What was the inflation rate for 2021?

     Result: (270.970 - 258.811) / 258.811 x 100 = 4.70..., about 4.7%. Prices rose much faster than 2 percent, the Federal Reserve's inflation goal, so this measure was a warning sign. (The Fed measures its goal with the PCE price index, not the CPI, so 2 percent is a rough benchmark for CPI numbers.)

   • Total production and growth (real data)

     Real GDP was 20,285 billion dollars in 2020 and 21,556 billion in 2021. What was the growth rate for 2021?

     Result: (21,556 - 20,285) / 20,285 x 100 = 6.26..., about 6.3%. Production bounced back strongly and passed its 2019 level of 20,716 billion.

   • Income (real data)

     Real disposable income per person rose from $47,249 in 2019 to $50,049 in 2020, even though production fell. How much did it rise, and how is that possible?

     Result: (50,049 - 47,249) / 47,249 x 100 = 5.92..., about 5.9%. Income includes payments from government, and BEA Table 2.1 shows government social benefits to persons rising from about $3.09 trillion in 2019 to $4.19 trillion in 2020 (pandemic relief payments and unemployment benefits). Income and production do not always move together.

   Part 2: How do you judge a number? A number by itself is not good or bad. Teach three questions: (1) Compared with what? Compare with last year and with several years. (2) Compared with a goal or a normal range? The Federal Reserve's official inflation goal is 2 percent, measured with the PCE price index (use it as a rough benchmark for the CPI), and in its September 2026 projections Federal Reserve officials put the long-run normal unemployment rate at about 4.2 percent. (3) Do the measures agree? If jobs, production and real income all rise while inflation stays near 2 percent, the economy is strong. If they disagree, say so and explain which measure you weigh most.

   Teacher tip. Watch for students who divide the unemployed by the whole population instead of the labor force, or who subtract index numbers and call the difference a percent. Have them write the formula before the numbers every time.

3. Guided Practice15 minutes

   Who counts as unemployed? Context note: the Bureau of Labor Statistics (BLS) is the part of the U.S. Department of Labor that measures jobs and prices. Every month, Census Bureau interviewers ask about 60,000 households about work during one week, and the BLS turns the answers into the official numbers. Source 1 comes from a BLS page that explains the method to the public. Read Source 1 aloud, one paragraph at a time.

   1When workers are unemployed, they, their families, and the country as a whole lose. Workers and their families lose wages, and the country loses the goods or services that could have been produced. In addition, the purchasing power of these workers is lost, which can lead to unemployment for yet other workers.

   [...]

   2The basic concepts involved in identifying the employed and unemployed are quite simple: People with jobs are employed. People who are jobless, looking for a job, and available for work are unemployed. The labor force is made up of the employed and the unemployed. People who are neither employed nor unemployed are not in the labor force.

   [...]

   3People are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work.

   [...]

   4The national unemployment rate. Perhaps the most widely known labor market indicator, this statistic reflects the number of unemployed people as a percentage of the labor force.

   5The labor force participation rate. This measure is the number of people in the labor force as a percentage of the civilian noninstitutional population 16 years old and over. In other words, it is the percentage of the population that is either working or actively seeking work.

   1. Why it matters. Prompt: in paragraph 1, who loses when workers are unemployed? Teacher note: the workers, their families and the whole country; the country loses goods and services that could have been made, and lost spending can cost other workers their jobs.
   2. The three groups. Prompt: use paragraph 2 to name the three groups every adult is sorted into. Teacher note: employed, unemployed and not in the labor force; the labor force is the first two together. Point to Diagram 1.
   3. The test for unemployed. Prompt: paragraph 3 gives three conditions. List them. Teacher note: no job, actively looked for work in the prior 4 weeks, and available for work now. All three must be true.
   4. Try three people (invented). Prompt: Ana, 17, goes to school and does not want a job. Ben, 45, lost his job and has sent applications every week. Cara, 70, is retired. Sort them. Teacher note: Ben is unemployed; Ana and Cara are not in the labor force, so they are not part of the unemployment rate at all.
   5. Two rates. Prompt: paragraphs 4 and 5 define two rates. What is the difference? Teacher note: the unemployment rate compares the unemployed with the labor force; the participation rate compares the labor force with the whole population aged 16 and over who are not in the military or in institutions.
4. Independent Practice15 minutes

   Reading a real news release. Context note: the Bureau of Economic Analysis (BEA) is the agency that measures GDP and income. On September 30, 2026, it released its report for August 2026. A few words to know: personal income is everything people receive, such as wages and government benefits; disposable personal income (DPI) is what is left after taxes; personal consumption expenditures (PCE) means consumer spending; real means adjusted for price changes; the PCE price index is a measure of prices like the CPI. Students read Source 2 on their own and answer the questions below in writing.

   1Personal income increased $66.6 billion (0.2 percent at a monthly rate) in August, according to estimates released today by the U.S. Bureau of Economic Analysis (BEA). Disposable personal income (DPI)—personal income less personal current taxes—increased $68.6 billion (0.3 percent), and personal consumption expenditures (PCE) increased $190.8 billion (0.9 percent).

   2Personal outlays—the sum of PCE, personal interest payments, and personal current transfer payments—increased $190.7 billion in August. Personal saving was $990.2 billion, and the personal saving rate—personal saving as a percentage of DPI—was 4.1 percent.

   3The increase in current-dollar personal income in August primarily reflected increases in compensation and government social benefits.

   4The $190.8 billion increase in current-dollar PCE in August reflected increases of $114.1 billion in spending on goods and $76.7 billion in spending on services.

   5Real PCE increased $92.8 billion (0.6 percent at a monthly rate) in August.

   6From the preceding month, the PCE price index for August increased 0.3 percent. Excluding food and energy, the PCE price index increased 0.2 percent.

   7From the same month one year ago, the PCE price index for August increased 3.4 percent. Excluding food and energy, the PCE price index increased 3.0 percent from one year ago.

   Questions for Source 2:

   1. Paragraph 1: by what percent did disposable personal income rise in August? By what percent did spending (PCE) rise?
   2. Paragraph 2: what was the personal saving rate, and what does that number mean in your own words?
   3. Paragraph 3: which two kinds of income pushed personal income up?
   4. Paragraph 6: did prices rise or fall from July to August 2026?
   5. Using the data table, fill in a dashboard for 2024: the unemployment rate, the change in employment from 2023, and the 2024 inflation rate. Then write one sentence judging each.

   Answers for the teacher: (1) DPI rose 0.3 percent and PCE rose 0.9 percent. (2) 4.1 percent: people saved about 4 cents of every dollar of after-tax income. (3) Compensation (pay from work) and government social benefits. (4) Prices rose: the PCE price index increased 0.3 percent. (5) Unemployment rate 6,761 / 168,106, about 4.0%, close to the long-run normal rate; employment 161,346 - 161,037 = 309 thousand more jobs, a small rise; inflation (313.689 - 304.702) / 304.702, about 2.9%, above the 2 percent goal but lower than in 2022 and 2023.

5. Closure10 minutes

   Evaluate a county. Students read Source 3, an invented report card for a fictional county. They will use it for the exit ticket and for quiz questions 13-17, so they should keep it in front of them.

   1Invented scenario, written for this page. Kestrel County is a fictional county of 100,000 people. Each year its planning office publishes a short report card on the local economy. Here are the numbers for the last two years.

   2Jobs. Last year 52,000 people were in the labor force and 49,400 of them had jobs. This year the labor force grew to 52,500, but only 48,825 people had jobs.

   3Prices. The office tracks the cost of a typical family's monthly basket of food, gas, rent, clothing and other things families buy. The basket cost $500 last year and $530 this year.

   4Production. The county's businesses produced goods and services worth $4.200 billion last year. Measured in last year's prices, so that price changes do not count, they produced $4.116 billion this year. The county's biggest factory, which makes boat engines, cut one of its three shifts.

   5Income. The total income of the county's 100,000 people was $3.200 billion last year and $3.296 billion this year, counted in each year's own dollars. The population did not change.

   Exit ticket (index card): "Name one measure in Source 3 that got better or worse, show the calculation, and say whether it is good or bad news for Kestrel County." Collect the cards and sort them by measure; use the mix to open the next lesson.

   Teacher note. The real data on this page come from federal agencies (BLS and BEA) and will be revised: the 2025 job numbers cover 11 months, and BEA updates GDP and income every year. If students look up the newest numbers, expect small differences. The page does not judge any government policy; it teaches students to read the measures.

Differentiation Strategies

Assessment Guidance

1. Question 1 of 20 · Multiple Choice

   Using the definitions in Source 1, how is this person counted? A parent, 38, stays home to care for two young children and is not looking for paid work.

   ANot in the labor force BEmployed, because caring for children is work CUnemployed, because the parent has no paid job DBoth employed and unemployed

2. Question 2 of 20 · Multiple Choice

   By the three conditions in Source 1, paragraph 3, which invented person is unemployed?

   AJo has no job and last looked for work 8 weeks ago BRay works 15 hours a week and wants more hours CKim has no job, applied last week, and can start now DIvy has no job and looked last week, but cannot start for 3 months

3. Question 3 of 20 · Multiple Choice

   Use the data table. What was the U.S. unemployment rate in 2025?

   AAbout 2.7% BAbout 4.5% CAbout 4.3% DAbout 7.1%

4. Question 4 of 20 · Multiple Choice

   Use the data table. How did employment change from 2020 to 2021?

   AAbout 4.8 million fewer people had jobs BAbout 4.8 million more people had jobs CAbout 9.7 million more people had jobs DAbout 4.3 million more people had jobs

5. Question 5 of 20 · Multiple Choice

   Use the data table. What was the inflation rate in 2022, measured by the CPI?

   AAbout 21.7% BAbout 7.4% CAbout 4.7% DAbout 8.0%

6. Question 6 of 20 · Multiple Choice

   Source 2, paragraph 7, says that from August 2025 to August 2026 "the PCE price index for August increased 3.4 percent." What does that mean?

   APrices were 3.4% higher than a year earlier BConsumer prices fell 3.4% over the whole year CPeople's incomes rose 3.4% over the year DPrices rose 3.4% during the month of August alone

7. Question 7 of 20 · Multiple Choice

   Why does the BEA measure total production as real GDP, in the prices of one base year (2017)?

   ATo count only goods made in factories BSo that price increases do not count as more output CBecause 2017 was the year with the most production in history DTo include only the production of the government

8. Question 8 of 20 · Multiple Choice

   Use the data table. What was the growth rate of real GDP in 2020?

   AAbout +2.1% BAbout -2.1% CAbout -8.1% DAbout +6.3%

9. Question 9 of 20 · Multiple Choice

   Use the data table. By what percent did real disposable income per person change from 2021 to 2022?

   AAbout -6.5% BAbout +6.1% CAbout -6.1% DAbout +4.7%

10. Question 10 of 20 · Multiple Choice

    Source 2, paragraph 1, says disposable personal income rose 0.3 percent in August and PCE rose 0.9 percent. Which statement follows from those two numbers?

    AAfter-tax income grew faster than consumer spending BBoth income and spending fell in August CSpending rose by only 0.3 percent DSpending grew faster than after-tax income

11. Question 11 of 20 · Multiple Choice

    The data table shows real disposable income per person, not the total for the whole country. Why is the per-person number better for judging how the typical person is doing?

    AA bigger population can raise the total but shrink each share BPer-person numbers are not adjusted for inflation at all CTotal income is kept secret, and BEA does not publish it DPer-person income always rises in any year GDP rises

12. Question 12 of 20 · Multiple Choice

    Why is the unemployment rate calculated as a share of the labor force instead of a share of all adults?

    ABecause the labor force is always smaller than the number unemployed BBecause adults over 65 are never counted in BLS surveys CBecause the BLS does not know how many adults there are DRetirees and others not trying to work are not jobless

13. Question 13 of 20 · Multiple Choice

    Use Source 3. What was Kestrel County's unemployment rate this year?

    AAbout 5.0% BAbout 7.5% CAbout 7.0% DAbout 3.7%

14. Question 14 of 20 · Multiple Choice

    Use Source 3. What was Kestrel County's inflation rate?

    AAbout 5.7% BAbout 6.0% CAbout 3.0% DAbout 30%

15. Question 15 of 20 · Multiple Choice

    Use Source 3, paragraph 4. What was Kestrel County's economic growth rate?

    AAbout -2.0%: production shrank BAbout +2.0%: production grew CAbout +3.0%: the same as the rise in money income DZero, because prices are not counted

16. Question 16 of 20 · Multiple Choice

    Use Source 3. Last year the county's total income of $3.200 billion could buy 6.4 million of the typical baskets ($3.200 billion / $500). How many baskets could this year's income buy, and what does that say about real income?

    AAbout 6.6 million: real income rose BAbout 6.4 million: no change CAbout 6.0 million: real income fell DAbout 6.2 million: real income fell

17. Question 17 of 20 · Short Answer

    Use Source 3. Write a short evaluation (3-4 sentences) of the state of Kestrel County's economy, using at least three measures with numbers.

    Show model answer

18. Question 18 of 20 · Short Answer

    Source 2, paragraph 3, says the rise in personal income "primarily reflected increases in compensation and government social benefits." Why might an economist want to know which kinds of income are rising, and not only the total?

    Show model answer

19. Question 19 of 20 · Short Answer

    Source 1, paragraph 1, says that when workers are unemployed, "they, their families, and the country as a whole lose." Explain two ways the country loses, using the source.

    Show model answer

20. Question 20 of 20 · Short Answer

    A news story reports only one number: "The unemployment rate fell to 3.5 percent." Explain why that number alone is not enough to say the economy is healthy. Name two other measures you would check and what each would tell you.

    Show model answer

These standards connect to D2.Eco.11.6-8: prerequisites to review first, parallel standards at the same level, and next steps that build on it.

Standard text: National Council for the Social Studies (NCSS), The College, Career, and Civic Life (C3) Framework for Social Studies State Standards: Guidance for Enhancing the Rigor of K-12 Civics, Economics, Geography, and History (Silver Spring, MD: NCSS, 2013). NCSS was not involved in the production of this lesson and does not endorse it.