Escaping the CV-19 lock-down trap
Recent CDC data might confirm only 6% of US CV-19 fatalities were without co-morbidities, but sections of our political class seem reluctant to relinquish control and restore normality in society and economy. No more so than in the US ahead of the November elections and were those opposed to Trump appear determined to sustain the lock-downs in order to undermine the pace of economic recovery as well as support mail-in ballots, with all the potential for voting fraud that these entail. The profile of US employment gains following the initial steep falls meanwhile appears to support a recovery that is easing from a ‘V’ to more like a ‘U’ or perhaps even a ‘W’ as Democrat states and Congress attempt to thwart additional Federal aid and an early end to lock-downs and social restrictions.
As furlough schemes end and retail and hospitality businesses start to re-open, weekly unemployment insurance claims have been declining (by -2.226m for the first 3 weeks of August) and this also continues to be broadly reflected by the BLS monthly employment estimates, with a net +1.027m of additional private sector jobs reported for August.
Since March however, this still represents a decline in reported monthly private sector jobs of -10.718m (or -7.4% YoY), notwithstanding the usual sleight of hand with the seasonal adjustments having raised this by 816k from an underlying decline of -11.534m.
As the lock-downs progressively reverse, often depending on the political affiliation of each State, so we have also been seeing jobs returning, particularly in those customer facing activities, such as retail and hospitality, that were initially so heavily impacted. The heavy preponderance in MoM job growth from ‘temporary help’ however, ought to provide a reminder of the fragile nature of the ‘recovery’ to date.