During World War II, Allied political leaders flashed a two-finger salute signifying a “V,” for “Victory.” Today that same salute might instead denote “V” for “V-shaped recovery,” a victory of another kind. Across the nation, as the pandemic lockdowns slowly end, the economy is picking up pace. Will it continue? Sure looks that way.
Don’t be fooled by Thursday’s report on weekly jobless claims, which rose 1.51 million for the week ending June 13, causing a mild stock market sell-off after it was announced. That’s a bad number, to be sure, and higher than the 1.3 million expected by most economists.
But the weekly claims data have been falling. After hitting 6.87 million in the final week of March, claims have now fallen with each report, even during the lockdown.
In short, the economy took a punch in the gut but is now getting up off the canvas.
The good news is that, despite the big weekly increases, the number of people who continue to receive jobless benefits week to week is now falling. That shows many are returning to work.
Continuing claims for unemployment benefits during the week ending May 30 fell by 62,000 to 20.54 million. That’s down from 20.61 million the week before and down almost 4.4 million since hitting a peak of 24.91 million in mid-March.
Some note the improvement seems to be slowing. That may be true, but there’s a good reason for that: the $600 in weekly federal “stimulus” aid for the unemployed. When added to state unemployment benefits, some people earn more by not working than by going back to work.
As Breitbart News reported Thursday, in addition to regular assistance, “the government now offers two new forms of unemployment benefits to business owners, self-employed, gig-workers, and independent contractors who would not ordinarily qualify for unemployment benefits.”
Moreover, the improvement in the weekly data has been reflected in the overall monthly employment data. In early June, financial markets received a jolt of the good kind when the government announced that the May jobless rate surprisingly fell from 14.7% to 13.3%. Virtually all estimates expected a big rise.
How can that be? Businesses added 2.5 million workers to their payrolls for the month, wholly unanticipated. That job burst was further validated by Wednesday’s Census report showing that May retail sales soared 17.7%, more than offsetting April’s 14.7% lockdown decline.
“That means that we are already getting past the coronavirus lockdowns, and we’re on track to defeat the pandemic with a V-shaped recovery,” wrote Lewis K. Uhler and Peter J. Ferrara on the Issues & Insights web site last week.
What’s fueling all this? Thrift, believe it or not. When Americans went into lockdown, they also tightened up their personal finances.
As Wall Street economist Ed Yardeni noted in his Morning Briefing for Thursday, “Personal saving soared from $1.4 trillion (saar) during February to $2.1 trillion during March to a whopping $6.1 trillion during April. All that cash certainly contributed to the V-shaped rebound in retail sales last month.”
After being locked down for months, people want to spend again and have the cash to back it up.
Not surprisingly, all this good news has Democrats in a panic. You can tell because they’re not talking about it.
After all, a good economy could sink their hopes of retaking the White House and the Senate in November. And, in case you’re wondering, that’s a big reason why their left-leaning Big Media allies continue to harp on the mortal dangers of opening up the economy, even as they ignore or praise mass Black Lives Matter demonstrations and street violence by Antifa’s amateur storm troopers.
The clear message: Social distancing is for flyover country, the “deplorables,” not our supporters.
This panic over a possible V-shaped recovery – rather than a sluggish “U-shaped” one – began to set in a couple of weeks ago, after Harvard economist and former Obama adviser Jason Furman told a bipartisan group of political officials: “We are about to see the best economic data we’ve seen in the history of this country.”
And no, it wasn’t a joke. As far as we’ve been able to tell, no one laughed. Indeed, Furman later told an interviewer, “Everyone looked puzzled and thought I had misspoken.”
He hadn’t. And the message went out. As an unnamed former Obama adviser “who is still close to the former president” told Politico reporters Ryan Lizza and Daniel Lippman, “This is my big worry.” He added that concern among other Democratic Party officials is “high – high, high, high.”
Thanks for the blunt honesty. Please remember those words when you start seeing the media play up new COVID-19 infections again, after all but ignoring them during the George Floyd and Rayshard Brooks demonstrations and riots of recent weeks.
As the saying goes, they have a dog in this fight. Soon there will be calls for renewed lockdowns, with more media hyping of coronavirus stats. Sorry. Americans need to stand firm: No more lockdowns. No more artificial depression. Sure, we may continue to have some COVID-19 issues and “hotspots,” and we’ll have to deal with them.
Social distancing, fine. Masks, which may indeed impede the Chinese virus’ spread, fine. Until we conquer this virus, we need to be careful.
But for many if not most Americans, the lockdowns have been literally worse than the disease, a devastating economic blow to their lives, personal finances and hopes. It’s time to end the quarantine by making sure the V-shaped recovery continues.
— Written by the I&I Editorial Board