This week, there was more good news about vaccines and treatments for Covid-19, which brought with them a welcome dose of optimism about the world.

Several vaccine trials now offer hope that, in the not-too-distant future, Covid-19 might be brought under control and life can return to normal.

But in the meantime, several economic reports came along to remind us that despite our possible salvation being close at hand, our current state of muddling through may in fact be postponing a grim economic reckoning.

The CSO's Labour Force Survey is the official source for much of our information on the number of people at work and what they do.

The CSO's work, like much else, has been bedevilled by Covid.

Our current state of muddling through may in fact be postponing a grim economic reckoning

There is an internationally agreed method for calculating the numbers employed and unemployed. But there are also hundreds of thousands of people now dependent on the Pandemic Unemployment Payment (currently 350,000 people, approximately).

Indirectly, roughly the same number again are reliant, through their employer, on the Employment Wage Subsidy Scheme.

The official internationally comparable unemployment rate, when adjusted for seasonal factors, was 6.7% in the third quarter which was equal to 164,300 people. But the CSO has also worked out a figure for unemployment when adjusted for Covid-19, which stood at the end of October at 20.2% or 501,640.

There's a huge difference there of just over 337,000. That's a lot of people for whom the Government's continued response to the pandemic will remain a vital lifeline.

There is also hidden unemployment out there

So what's really going on in the labour market?

The "official" figure is probably too low and when Covid-19 recedes, the adjusted figure will hopefully be dramatically reduced so it may be too high. The answer to the puzzle depends – as it has always done – on the path the virus takes and for how long companies can hang in there with the various supports from Government. We've seen just this week how quickly the trajectory of infections can change.

The CSO also measured actual hours worked.

They had fallen by 16.8 million or 22% on an annual basis in the second quarter but had recovered by the third quarter. But they are still down four million hours or 5.4%. Put simply, that means there's hidden unemployment out there.

Also, the percentage of PUP recipients surveyed who considered themselves unemployed was just over 28% compared to the Covid adjusted unemployment rate of 15.3% in quarter three.

Getting a consistent picture of what's going on hasn't been easy

This all leads to the conclusion that a sizeable number of those who are on PUP payments may effectively be unemployed now, or in the future.

There was more evidence from a study carried out by the Central Bank on company registrations and insolvencies that the economy is in a suspended state of animation. The report detailed how the number of insolvencies remained at pre-pandemic levels, despite the severe economic shock of Covid. It concluded that Government support and forbearance from banks and creditors are keeping off the evil day for many firms.

The European Commission noted in its autumn economic report on Ireland this week that supports have meant Covid's "adverse impact will only be delayed" and it advised Irish banks to prepare for more loans to go bad.

Despite Covid-19 feeling like an enormous psychological and emotional drag for everyone, it's actually a fast-moving phenomenon for economies. There have been some pleasant surprises too, like how well our tax base has held up. Getting a consistent picture of what's going on hasn't been easy.

But it would be very unwise to believe a vaccine will protect us from damage that may already have been done, even if we can't clearly see it yet.