The stock market and the economy are up, up and away
While all things Wuhan coronavirus-19 pandemic and the nationwide protests and riots following the tragic death of George Floyd dominated all media, other events occurred in spite of these forces that you might have missed. As business network summed up:
Nasdaq hits intraday record | Dow jumps 800 points | 2.5 million jobs added
A V-shaped recovery appeared all but off the table just a couple of weeks ago, but the great economic reopening is swinging the lines on the charts upward.
Friday's unemployment report showed the economy actually added 2.5 million jobs - which was better than the 8.3 million payrolls economists had expected it to lose. I was also a lot better than the 20.7 million jobs lost in April.
"Barring a second surge of Covid-19, the overall U.S. economy may have turned a corner," said Tony Bedikian, head of global markets at Citizens Bank, "even though it still remains to be seen exactly what the new normal will look like."
Huh? Two point five million jobs added in May? In spite of the lockdown and closure of the economy? Apparently so. Yes, the 13.3 unemployment in May 2020 announced on Friday is still tragically high, but according to another CNBC report:
Employment stunningly rose by 2.5 million in May and the jobless rate declined to 13.3%, according to data Friday from the Labor Department that was far better than economists had been expecting and indicated that an economic turnaround could be close at hand.
Economists surveyed by Dow Jones had been expecting payrolls to drop by 8.33 million and the unemployment rate to rise to 19.5% from April's 14.7%. If Wall Street expectations had been accurate, it would have been the worst figure since the Great Depression.
As it turned out, May's numbers showed the U.S. may well be on the road to recovery after its fastest plunge in history. ...
The huge increase in jobs "suggests that the US economy is more resilient than expected," said Seema Shah, chief strategist at Principal Global Investors.
More resilient? More resilient than expected? Huh? All those experts — those heads of global markets, those chief strategists, with all their access to facts — expected much worse. Understandable, actually. And this good news might be a bubble, easily punctured by the delayed economic effects of the pandemic's lockdown and the economic and social fallout from the ongoing protests. So while we still don't know what "the new normal will look like," and I make no claims to being an expert or chief strategist or head of anything, I cautiously, but optimistically, predict some rough times ahead but an overall pretty good new normal of low unemployment and liberal hostility to President Donald J. Trump (R).
Old normal. New normal. Be resilient.