The U.S. Economy Regained 4.8 Million Jobs in June… The unemployment rate dropped from 13.3% to 11.1%.
What it means— Bill Cosby claimed his grandmother had the best answer to the question of whether the glass is half full or half empty. She explained that it depended on whether you were pouring or drinking. It’s all about context. Gaining almost five million jobs is fabulous, including the two million in leisure and hospitality. Now that we’re shutting down parts of the economy again, how many of those jobs will remain?
The surveys for the unemployment report are taken during the week that includes the 12th day of the month. On “COVID-19 time,” that feels like a million years ago. As we march toward July 31, the day that the weekly $600 bonus unemployment checks are due to end, the conversation about jobs will get louder.
Expect Congress to pass another stimulus before then extending those benefits. Republicans have pushed back on the idea, but it’s likely President Trump along with most every politician facing the voters will be eager to keep the cash flowing as the election gets closer.
Several States Shut Down Activity as Daily COVID-19 Cases Topped 50,000… Some states, such as Texas, are setting daily infection records even as mortality rates fall.
What it means— It’s all about the young and hospitals. Roughly half of the states saw at least a 25% increase in COVID-19 cases over the past seven days as mostly young people showed up with the disease. The increased infection rate reflects massive testing at job sites and gathering venues where suspected cases are referred to healthcare facilities.
Even though only a small percentage of the new cases require hospitalization, the numbers are big enough to renew concerns about overwhelming hospitals. To guard against that, some states and many local governments took precautionary measures ahead of the Fourth of July weekend by shutting down activities and parks and many beaches.
S&P CoreLogic Case-Shiller Home Price Index Up 4%… The index showed a 4% price increase over the same month last year.
What it means— The Home Price Index is reported on a two-month lag, which with the pandemic might as well be ancient history. But from other reports on existing home sales, which account for about 90% of all sales, we know that prices have increased as buyers bought up available inventory.
So far, real estate has held up nicely due to higher-income workers retaining their jobs, falling mortgage rates and low inventory. If unemployment remains over 10% for several months, we’ll see if that can last. The big question goes back to the first issue this week: how long will home sales rise if the pandemic holds down the economy longer than expected?
Anderson Economic Group Estimates Damage From First Week of Vandalism and Looting at $400 Million… Protesting and vandalizing or looting aren’t the same thing. Protesters can shut down businesses by blocking access on roads or sidewalks, but they don’t break glass, spray graffiti or steal stuff. Those activities are criminal.
The Anderson Economic Group estimates that looting and vandalism between May 29 and June 3 in the 20 largest metropolitan areas in the U.S. cost about $400 million including property damage, lost inventory, cleanup, reconstruction and closure-related lost wages. This was for just one week, and the estimate was certainly on the conservative side because the group only included verifiable instances of unlawful activity. The group assigned no cost to lawful protests.
Data supplied by HS Dent Research
“When the facts change, I change my mind.
What do you do, sir?” ~ John Maynard Keynes
Our plan is “the plan will change.”
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