Commentators have pointed to last month’s drop in unemployment as a sign that a “V” recovery is in the making. Further, they point to the rising price of gold, the stock market and bonds as a sure sign of better days ahead.
We cannot foretell the future, however, we can describe the present, and it ain’t pretty. There is no singular government statistic that can take the temperature of the job market, or for that matter, the U.S. economy. That is why this joint survey by YouGov and Bankrate is so important.
The survey indicates that, contrary to Administration pronouncements, half of all households have had their incomes negatively impacted by COVID-19. Rather than looking at just laid off/furloughed workers, the survey takes into account workers whose hours have been reduced, businesses unable to operate as usual, workers who have taken pay cuts and other reductions in income.
The devastating economic impact of the virus has been masked by massive support from the Fed and Congress. If this level of support is not continued with a pending CARES 4.0 stimulus plan, the results will likely be more pain for half of U.S. households, less economic growth, lower corporate earnings and at some point, lower markets.
One final point to ponder, just in case you thought that this will quickly pass, the Wall Street Journal reports today that the “coronavirus is back with a vengeance in places where it had all but vanished.” The Journal reports that Australia, Hong Kong and Japan are witnessing “new high water marks in daily infection numbers in the past week.” As Victoria (Australia) state Premier Daniel Andrews stated “Pretending that it is [over] because we all want it to be over is not the answer,” he said. “It is indeed part of the problem.”