I’m not sure how much lower this can go. I am thinking that 6% or higher is going to be the floor here.
“Davidson” submits:
US Household Survey reported a rise of 2.243mil employed to 149,806,000 over Sept 2020. Vehicle Sales SAAR(Seasonally Adjusted Annual Rate) is estimated at 16.4mil.
The Feb 2020 159,739,000 report was the cycle high pre-COVID-19 which means the US is only 6% below peak employment at historical levels. US Unemployment which is calculated from the Household Survey fell from 7.9& to 6.9%. The media reaction was mixed. The chart appears to indicate a long distance from prior highs only because the employment scale begins at 130mil which exaggerates near term changes. Most use the Establishment Survey which does not count self-employment and have missed this recovery by seeing only 638,000 gain and wring their hands that it is not enough to bring down claims of 20mil unemployed which come from multiple misrepresentations elsewhere. The facts as they stand on a same measured basis indicate a strong recovery is present. (All economic measurements are estimates, What matters most are the trends in the data not individual reports which are often revised as new data trickles in over time)
The weekly reported Continued Claims for Unemployment Insurance over the past 4wks predicted a significant improvement was occurring. The pace of decline in weekly Continued Claims indicates a return to pre-COVID-19 levels could occur shortly. Major states remain locked down, i.e. NY, CT, CA, MI, NJ and still have 14day quarantine restrictions in place vs 45 other states. This hinders transportation and a host of badly needed business maintenance and new construction projects. International travel remains heavily restricted. Should these restrictions be removed, US employment could recover rapidly.
Equity markets are reflecting economic improvements. The focus on stay-at-home issues is expected to shift towards the many other companies currently reported better than expected earnings reports and raised guidance.
